Moratorium under Section 14 of IBC
On CIRP admission, NCLT imposes moratorium: no suits, recovery, asset transfer, or termination of essential services against corporate debtor.
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Insolvency & Bankruptcy
Understand business rescue and restructuring. IBC, Corporate Insolvency Resolution Process (CIRP), liquidation, NCLT proceedings, resolution professionals, and insolvency frameworks.
12 questions0 Fresher3 Intermediate9 Senior
Difference between Financial Creditor and Operational Creditor under IBC
Financial creditor: lender / debt with time-value (interest). Operational creditor: dues for goods/services, employees, tax. Different CIRP rights and CoC representation.
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Corporate Insolvency Resolution Process (CIRP) — overview and timeline
Operational/financial creditor or corporate debtor files §7/§9/§10. NCLT admits → IRP appointed → CoC formed → 180+90 days (extendable to 330) to approve resolution plan.
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Pre-Packaged Insolvency Resolution Process (PPIRP) for MSMEs
Available only to corporate MSMEs. Debtor-in-possession with RP supervision; 120-day timeline; base resolution plan + Swiss challenge.
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Avoidance transactions under IBC — preferential, undervalued, fraudulent
RP/Liquidator can apply to NCLT to set aside transactions made within look-back periods (1-2 years) that benefit related parties or defraud creditors.
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Cross-border insolvency under IBC — Section 234 and 235
§234 enables bilateral agreements with other countries; §235 lets NCLT request foreign courts. Draft Part Z (UNCITRAL Model Law) pending enactment.
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Personal Guarantor insolvency — Part III of IBC
Personal guarantors to corporate debtors can be admitted into insolvency under §94/95. Adjudicating authority is NCLT (concurrent with corporate debtor).
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Compromise with creditors outside IBC
Pre-pack restructuring under §230-232 compromise scheme; preserves management; cheaper / faster than NCLT-supervised CIRP for stressed assets.
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Conversion of debt to equity — regulatory framework
Banks convert debt to equity under SDR, S4A or strategic restructuring; FEMA permits FCCB / ECB conversion. Listed entities follow ICDR pricing norms.
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Section 29A — disqualifications for resolution applicants
Bars wilful defaulters, NPA promoters (1 year+), undischarged insolvents, disqualified directors and related parties from submitting resolution plans.
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Role of Resolution Professional (RP) during CIRP
RP takes over management of corporate debtor, preserves assets, runs the company as a going concern, invites resolution plans and reports to CoC.
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Liquidation under IBC — when and how
Triggered if CoC resolves with 66% vote, no plan approved within timelines, or plan is rejected. Liquidator distributes per §53 waterfall.
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