The liquidator is an insolvency professional on whom all the powers of the Board of Directors, key managerial personnel, and the partners, as applicable, of the Corporate Debtor are vested by the Adjudicating Authority upon Liquidation order being passed under section 33 of the Insolvency and Bankruptcy Code, 2016.
ROLE OF LIQUIDATOR IN INSOLVENCY AND BANKRUPTCY
- Where the Adjudicating Authority issues an order for liquidation of the corporate debtor, the resolution professional engaged for the corporate insolvency resolution process subject to the submission of a written consent by the resolution professional to the Adjudicatory Authority in specified form act as the liquidator for the purposes of liquidation.
- On the appointment of a liquidator, all powers of the board of directors, key managerial personnel, and the partners of the corporate debtor, as the case may be, shall stop having an impact and shall be vested in the liquidator.
- The personnel of the corporate debtor shall cover all help and support to the liquidator as may be required by him in organizing the affairs of the corporate debtor as they apply in relation to liquidation procedure with the replacement of references to the liquidator for references to the interim resolution professional
The Adjudicating Authority shall by order to substitute the resolution professional, if—
- The resolution plan given by the resolution professional was rejected for failure to meet the desired requirements.
- the Board recommends the replacement of a resolution professional to the Adjudicating Authority for reasons to be recorded in writing; or
- The resolution professional isn’t able to provide written consent.
- The Adjudicating Authority may guide the Board to suggest the name of another insolvency professional to be appointed as a liquidator in certain situations.
- The Board shall propose the name of another insolvency professional along with written consent from the insolvency professional in the specified form within ten days of the direction issued by the Adjudicating Authority.
- The Adjudicating Authority shall, on receipt of the suggested plan of the Board for the appointment of an insolvency professional as liquidator, by an order engage such insolvency professional as the liquidator.
- An insolvency professional proposed to be appointed as a liquidator shall charge such fee for the conduct of the liquidation actions and in such percentage to the value of the liquidation estate assets, as may be stated by the Board.
- The fees for the conduct of the liquidation proceedings shall be paid to the liquidator from the proceeds of the liquidation estate.
How ASC Helps?
- Ensures that there is no misuse by any stakeholder to delay proceedings, strip asset value, or otherwise work to the detriment of the business and other stakeholders.
- Assistance in preparing and filing a scheme for the turnaround of the company.
- Representation of other categories of creditors and unsecured creditors and stakeholders with limited right to represent and hearing without the right to vote on the plan.
- Assistance in the Assessment of claims made by creditors.
- Registering the progress of claims, the situations that led the company into insolvency, and giving information about the distribution of assets.
- Company assets to be professionally valued during the liquidation process if returns for creditors are to be maximized.
- Ensuring an equitable distribution of funds to creditors, taking account of the prescribed order.