Page 46 - Banking Finance October 2022

ARTICLE

India from trading in securities or accessing the A Corporate prepares a Base Resolution to Financial
securities markets; Creditor.
has been a promoter or in the management or control Approval from financial creditors (other than related
of a corporate debtor in which a preferential parties) is a prerequisite for the filing of an application
transaction, undervalued transaction, extortionate for initiating PPIRP. (Representing not less than 66%, in
credit transaction or fraudulent transaction has taken value of the financial debt due to such creditors)
place and in respect of which an order has been made
Financial Creditor can propose name of IRP with 66%
by the Adjudicating Authority under this Code.
of Voting (value of financial debt)
Corporate Debtor needs to file an application with the
Other General Prerequisite conditions
NCLT under Section 54C for initiating PPIRP within 90
During the period of three years preceding the initiation
days, complying with other applicable provisions of the
date the CD
IBC;
Not undergone PPIRP,
The NCLT shall, within a period of fourteen days of the
Not completed corporate insolvency resolution
receipt of the application, by an order admit/reject the
process and
application;
Not undergoing a corporate insolvency resolution
AA is required to admit or reject within 14 days from
process. the date of filing. If admitted PPIRP commences.
No liquidation order by NCLT against CD Moratorium commences from the date of admission.

Corporate Debtor or its promoter are otherwise Public announcement to be made within 2 days. RP
eligible to submit a resolution plan under Section 29A Finalizes the List of Claims and constitutes CoC and
of IBC, meaning thereby that the account of the conduct meetings.
Corporate Debtor is not NPA and the promoters of the
The Pre-Packaged Insolvency shall commence from the
Corporate Debtor are not wilful defaulters and/or
date of admission of the application. The time-limit for
barred on other parameters specified in Section 29A of
its completion is within a period of one hundred and
IBC;
twenty days from the pre-packaged insolvency
The FCs who are not related parties of the CD and have commencement date;
not less than ten per cent of the value of the total
The resolution professional ("RP") shall procure and
financial debt of such creditors may propose names of
submit the resolution plan, within a period of ninety
insolvency professionals to be appointed.
days from the pre-packaged insolvency commencement
Special Resolution/Resolution: date. The base resolution plan by the promoter of
CD being Corporate Debtor shall pass a special MSMEs is to be approved by committee of creditors. If
resolution approving the filing of an application for the base resolution -plan is not approved by the
initiating PPIRP or committee of creditors, the RP shall invite prospective
resolution applicant to compete with base resolution
CD being LLP shall pass at least three-fourth of the
plan;
total number of partners of the corporate debtor
approving the filing of an application for PPIRP. If CoC approves the resolution plan with 66% voting, RP
to submit the same to AA for approval
The CD shall provide to Financial Creditors a base
Resolution Plan. If no resolution plan is approved by the committee of
creditors, the RP shall file an application with the NCLT
Process Flow: for termination of the pre-packaged insolvency
The procedure for initiation and completion of Pre-Packaged resolution process. The jurisdictional NCLT Bench may
Insolvency, as of now available only for MSMEs, is broadly inter-alia terminate the Pre-Packaged Insolvency and
as follows: pass a liquidation order.

46 | 2022 | OCTOBER | BANKING FINANCE