Page 50 - BANKING FINANCE APRIL 2024

ARTICLE

DECODING THE

COMMERCIAL

WISDOM OF

COMMITTEE OF

CREDITORS

Introduction: Creditors (CoC), a pivotal body responsible for making critical
decisions that can significantly impact the fate of a
Insolvency and Bankruptcy Code (IBC), 2016, consolidates
distressed company. This article delves into the concept of
and amends the laws relating to reorganization and
commercial wisdom exercised by the CoC and its implications
insolvency resolution of corporate persons in a time bound
manner for maximization of value of assets of such persons, for the insolvency resolution process in India.
to promote entrepreneurship, availability of credit and
The CoC has been enabled under the Code, like the Board
balance the interests of all the stakeholders.
of Directors, to take the decisions in respect of the
Corporate Debtor, during the currency of the corporate
4 pillars of IBC infrastructure are - Insolvency Professionals
insolvency resolution process ('CIRP'). As a part of this
(IP), Information Utilities (IU), Adjudicating Authorities (AA)
enabling system, the Adjudicating Authority while
& Insolvency and Bankruptcy Board of India (IBBI).
commencing the process of CIRP for a company, appoints a
resolution professional, who co-ordinates and executes all
At the heart of the resolution process lies the Committee of
the decision making during the CIRP and thereby conducts
the CIRP of the company. In respect of numerous aspects,
About the author Resolution Professional is bound to take the prior approval
of the CoC.
U Upender
Chief Manager The CoC comprises only financial creditors; operational
Union Bank of India creditors are consequently relegated to a position that
ZLC Hyderabad
leaves them ill-equipped to claim their dues or even

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