What is a resolution plan under IBC?

A resolution plan is a proposal that aims to provide a resolution to the problem of the corporate debtor's insolvency and its consequent inability to pay off debts. It needs to be approved by the committee of creditors (“COC”), and comply with mandatory requirements prescribed in IBC.

Similarly, what is resolution plan in IBC?

A resolution plan may entail allotment of shares at a discount. The Companies (Amendment) Act, 2017 has allowed companies to issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan.

Also, who approves the resolution plan under IBC? The committee of creditors may approve a resolution plan by a vote of not less than 66% of voting share of the financial creditors, after considering its feasibility and viability, the manner of distribution proposed, which may take into account the order of priority amongst creditors as laid down in sub-section (1) of

Additionally, what is a resolution plan?

A resolution plan is a comprehensive document, which details the characteristics of a bank and describes the preferred resolution strategy for that bank, including which resolution tools to apply. It concludes with a resolvability assessment of the bank.

Who can submit a resolution plan?

Any person other than the defaulter company may also be allowed to submit a resolution plan for the purpose of takeover of the company as a going concern with such other terms and conditions for takeover in relation to discharge of the liabilities of the company, etc.

Related Question Answers

Who is a resolution applicant under IBC?

"resolution applicant" means a person, who individually or jointly with any other person, submits a resolution plan to the resolution professional pursuant to the invitation made under clause (h) of sub-section (2) of section 25”.

What is the resolution plan?

A resolution plan is a comprehensive document, which details the characteristics of a bank and describes the preferred resolution strategy for that bank, including which resolution tools to apply.

What is CoC in IBC?

Among the seven amendments approved by the cabinet on Wednesday, a key change retroactively clarifies an IBC provision to put the committee of creditors (CoC) in driver's seat.

What is IBC code in banking?

The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha in December 2015. The IBC has 255 sections and 11 Schedules.

What is recovery and resolution planning?

Recovery and Resolution Planning. The Recovery and Resolution framework marks the Union's response to the critical issue of banks deemed 'too big to fail' during the recent financial crisis. As a result, significant progress has been made by the authorities and the financial institutions.

Who is a corporate debtor?

A corporate debtor under Insolvency and Bankruptcy Code, 2016 (IBC) is the Corporate Person who owes a debt to any person.

Can a financial creditor be a resolution applicant?

Provided that the resolution applicant shall not have a right to vote at the meeting of the committee of creditors unless such resolution applicant is also a financial creditor.

Can a promoter be a resolution applicant?

The Insolvency and Bankruptcy Code (IBC) 2016 in its preamble identifies itself as a law for reorganisation and resolution of companies. Under it, promoters or persons who controlled the insolvent company cannot apply as resolution applicant.

What is resolution process?

The insolvency resolution process (IRP) is a one under the Insolvency and Bankruptcy Code, 2016, where the National Company Law Tribunal (NCLT) initiates a corporate insolvency resolution process (CIRP) when a company defaults on making payment to creditors.

What do you mean by resolution?

In computers, resolution is the number of pixels (individual points of color) contained on a display monitor, expressed in terms of the number of pixels on the horizontal axis and the number on the vertical axis. The sharpness of the image on a display depends on the resolution and the size of the monitor.

What is resolution planning for banks?

A resolution plan is a comprehensive document, which details the characteristics of a bank and describes the preferred resolution strategy for that bank, including which resolution tools to apply. It concludes with a resolvability assessment of the bank.

What is resolution process under IBC?

Corporate Insolvency Resolution Process (CIRP) Corporate Insolvency Resolution Process is a recovery mechanism for creditors. If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP. After making an application then CIRP is initiated.

Who is resolution applicant in IBC?

"resolution applicant" means a person, who individually or jointly with any other person, submits a resolution plan to the resolution professional pursuant to the invitation made under clause (h) of sub-section (2) of section 25”.

What is the difference between insolvency and liquidation?

Insolvency can be considered a financial “state of being”, when a company is unable to pay its debts or when it has more liabilities than assets on its balance sheet, this being legally referred to as “technical insolvency”. Liquidation is the legal ending of a limited company.

What does the Nclt do?

The National Company Law Tribunal is a quasi-judicial body in India that adjudicates issues relating to Indian companies.

What is insolvency resolution professional?

Meaning of Insolvency Professional An Insolvency Professional is one who is registered with the Insolvency and Bankruptcy Board of India (IBBI). They are enrolled with an Insolvency Agency and they are involved in the dissolution process of an insolvent individual, companies, LLPs or partnerships.