Page 29 - Banking Finance February 2023

ARTICLE

and negotiate the best way to resolve stress in the (a) that the CD shall file an application for initiation
business) and post-commencement phase (drives value within a definite time not exceeding 90 days,
maximization and bestows the resolution plan with the
(b) that the PPIRP is not being initiated to defraud
statutory protection) is formal.
any person, and
The following activities need to be undertaken in Pre-
(c) the name of the IP approved by creditors to be
Commencement stage:
appointed as the RP.
Seeking approval of creditors, the applicant
Members of the CD shall pass a special resolution,
(Corporate applicant) shall convene meetings by
or at least 3/4th of the total number of partners of
serving the notice (minimum 5 days before the date
the CD shall pass a resolution, approving the filing
of the meeting/s unless a shorter time is agreed to
of an application for initiating PPIRP as required in
by all of them) to the Unrelated Financial Creditors
Code.
(UFCs -that is, financial creditors who are not
related parties of the CD). In cases where there are CD shall prepare a BRP (BASE RESOLUTION PLAN)
no UFCs, then meetings of Unrelated Operational in conformity with the requirements
Creditors (UOCs) will going to be called and the
UOCs shall perform the same duties and functions Application Phase: (STEP-3)
as the UFCs.
The applicant shall file the application in electronic form,
The notice of the meeting shall indicate the date, before the AA for initiating PPIRP. The said application shall
time, and venue of the meeting and specific agenda be accompanied by the following documents:
items for discussion. i. Record of default;
The applicant shall enclose a list of creditors and ii. Consent of the IP proposed to be appointed as RP,
the amount due to each of them, along with the
iii. Approval of UFCs for initiation,
notice convening the meeting seeking approval for
iv. Consent of the IP proposed to act as AR, if any,
appointment of an IP as RP.
v. Declaration by Directors/Partners,
In the meeting of UFCs, creditors having at least
vi. Members' Resolution or Partners' Resolution;
10% of the value of debt shall propose the name of
an IP eligible under the Regulations, for vii. Declaration by CD regarding avoidance transaction(s),
appointment as RP.
viii. Report of the RP,
UFCs representing not less than 66% in value of debt ix. Audited financial statements of the last 2F.Y.
due to such creditors shall approve the
x. Provisional financial statements for current financial
appointment as RP and the terms of appointment.
year made up to the date of declaration
Majority of director/partners of the CD shall make
xi. Latest and updated Udyam Registration Cert. or proof
a declaration in dedicated Form covering/stating:
that the CD is an MSME;
xii. Affidavit stating that the CD is eligible under section 29A
of the Code to submit resolution plan in the PPIRP of
the CD;
xiii. A statement of affairs made up to a date not earlier
than 14 days from the date of application;
xiv. A statement giving the names and addresses of the
members or partners of the CD, with details of their
respective shareholdings;
xv. Proof that the application fee of Rs. 15,000 has been
paid;
xvi. Proof that a copy of the application has been served to
the IBBI; and

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