IBC FOR CORPORATE DEBTORS

As per section 7 and 9 of IBC, it is not compulsory to give the opportunity of being heard to the corporate debtor, before the admission of IBC application. And as per section 14, once IBC application is admitted, the management of the company goes in the hands of IRP proposed by such applicant. Hence, there become high chances that even a small default may trigger the situation where the company goes out to hands.

Due to the above mechanism, at one hand where creditors are recovering debts from the distressed company, whereas some creditors, are using IBC provision to threaten and harass the corporate debtor. It is a misuse of new law to create a pressure upon the corporate debtor to recover the fraudulent/bogus claims.

PROTECTION AGAINST THE FRAUDULENT CLAIMS

A corporate debtor can defend the Insolvency Petition filed against them if the claim raised by the creditor is not genuine or have been raised to harass the corporate debtor. When an application is filed against the corporate debtor, the corporate debtor should verify the accounts and identify whether the claim raised is genuine or not.

DEFENSE AGAINST THE INSOLVENCY PETITION

Under IBC every creditor, financial or operational, has to follow a certain procedure to establish the claim and initiate the insolvency resolution process. If the procedure is not duly followed then the corporate debtor has a very good defense to get the petition disposed of. Recently, Hon’ble Supreme court in the case of B.K. Educational Services Pvt. Ltd. has upheld the applicability of limitation Act to the IBC application and defaults.

AGAINST THE FINANCIAL CREDITOR
If the petition is filed by the financial creditor the corporate debtor should:-

# Check whether the key essentials to file the petition have been fulfilled or not? Firstly, the debt and default should have occurred before filing of petition and if none of the element is present, the petition filed by the financial creditor shall get rejected.
# Identify, whether the claim is genuine or not?  The corporate debtor should check the accounts thoroughly and verify the claim from the accounts. If any discrepancy arises, the corporate debtor should file the reply within the prescribed time period.

AGAINST THE OPERATIONAL CREDITOR
If the petition is filed by the operational creditor then the corporate debtor should check:-

# Prior to filing of petition the demand notice should have been issued by the operational creditor in the prescribed format.
# The existence of any dispute is between the corporate debtor and operational creditor
# The pendency of any proceedings already pending between the operational creditor and corporate debtor.

If any of the above situations exists, then the corporate debtor has strong grounds to defend the petition.

SETTLEMENT & WITHDRAWAL

OTS Negotiation stands for One Time Settlement Negotiation wherein the Debtor can settle the insolvency case with a lumpsum amount. We help Debtors initiate OTS Negotiation with the Creditors. Section 100.

We assist Debtors and Guarantors file for Process Withdrawal under Section 12A, of IBC 2016. If your company is under insolvency, get in touch to disucsss the prospectives for it be pulled out of it.  Section 12  Regulation 30: Withdrawal of Application

Our well-qualified team of IBC, which includes insolvency professionals, is having versatile experience and represent various clients before NCLT and NCALT at PAN India level. Our experts do the preliminary research and give you the complete value addition.

VOLUNTARY INSOLVENCY

Business does not always flourish. It might face many challenges like financial crunch and business crisis due to which the Corporate Debtor delays in fulfilling its liability towards the creditors.

If the corporate debtor is unable to discharge it liabilities and does not have enough resources like funds available, to revive the business then corporate debtor can voluntarily file the insolvency petition to undergo the Corporate Insolvency Resolution Process and NCLT shall admit it if the petition has not been filed to defraud the creditors.

The partners of AAAIP are being appointed as liquidator during Liquidation Process and Voluntary Liquidation Process and would also be appointed as Bankruptcy Trustee after the provisions of Individual bankruptcy are notified. AAAIP has separated the function of Liquidation Process and have trained a separate batch of human resources for the handling of Liquidation Process. Following are the key responsibilities of the Liquidation Process team: –

# To communicate with all stakeholders such as Stakeholders Consultative Committee, other claimants, promoters and directors, Key Managerial Personnel, statutory authorities, auditors, employees of Corporate Debtor, etc for the purpose of seeking information, informing them about the commencement of Liquidation Process.
# To appoint professionals such as Registered Valuers for valuation of the assets of the Corporate Debtor; auditors for receipt and payment account, brokers for the sale of assets and even for selling the Corporate Debtor as going concern
# To maintain a penal of professionals after verification of key documents, antecedents and performance history for the purpose of their appointment for Corporate Debtors. AAAIP maintain a penal of advocates, auditors, registered valuers, media agencies, security service providers, etc. to be used for Liquidation Process.
# To interact and coordinate with different professionals appointed for the process and to provide the requisite information for completion of the job and to obtain their report.
# To convene Stakeholders Consultation Meetings and to prepare all notices, agenda, minutes, etc and to act as a bridge between stakeholders and the Insolvency Professional.
# To prepare and compile Asset Memorandum, Preliminary Reports, Progress Reports and co-ordinate for all the information required.
# To conduct the entire process e-auction process for sale of assets, preparation of e-auction document, keep the virtual data room, verify eligibility of bidder under section 29A and other documents for receipt and examination of bids. To issue a letter of intent and sale certificate and distribute the funds to stakeholders.

Liquidation Process is all about selling the assets of the Corporate Debtor and distributing the sale proceeds to stakeholders. The liquidator, in the normal course, gets better remuneration if the assets are sold in the first six months and his remuneration diminishes on every sale after the first six months. Therefore, AAAIP has made special arrangements for efficient and faster sale of assets of Corporate Debtor during the Liquidation Process. Following are the key deliverables of the Asset Sale team to partners of AAAIP: –
# Asset Sale Team prepare brief details of each asset and collect all the title documents and other details for proper due diligence of prospective buyers.
# The assets sale is advertised on various online portals for sale of assets such as property portals, vehicle sale portals, scrap sale portals, etc. and common digital mobile number is used for all the portals. The same common mobile number is used for various other publicity efforts for sale of assets such as banners, new paper inserts, new paper advertisements, bulk emails, bulk sms, etc.
# The leads generated out of all efforts are captured in software and all the leads are attended regularly to develop them as a bidder. Human resources posted are various cities co-ordinate for inspection of the asset by the prospective bidders.
# The team also create a Virtual Data Room (VDR) for uploading all the relevant documents, title papers, list of assets, etc for faster transfer of information to prospective bidders.

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There are situations during the CIRP and Liquidation Process that Insolvency Professionals would urgently require human resources to be posted at Corporate Debtor’s business. AAAIP has developed full-fledged department for recruitment and appraisal of human resources with a large database of industry experts and retired bankers who can be posted to monitor cash flow at Corporate Debtor

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AAAIP has an in-house IT department responsible for hardware and software maintenance. The team is also responsible for uploading various documents on the IBBI website and on the website of Corporate Debtor.

AAAIP has made in-house arrangements for state-of-the-art video conferencing capable of having a video conference call with more than 10 participants and also share files on the screen simultaneously. It has also made in-house arrangements for video recording of proceedings of any meeting of Committee of Creditors or Stakeholders. All these support services are available for partners of Insolvency Professional Entity. 

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