Resolution Plan - Meaning, Content, Drafting and Submission

Section 5(26) of the IBC, 2016 - "Resolution plan" means a plan provided by the resolution applicant for the corporate debtor's bankruptcy resolution as a going concern in line with Chapter II of Part II of the Insolvency and Bankruptcy Code. A resolution applicant, in simple terms, is "anyone who submits a resolution proposal to the resolution professional." 

A Resolution Plan is a rehabilitation plan for a corporate debtor (CD) that is going into insolvency. It is a report based on the information memorandum provided by the Resolution Professional that focuses on legal, financial, management, and technical methods to help the CD get back on its feet. It must be approved by the committee of creditors ("COC") and meet the IBC's required conditions.














Preparation and Submission of the Resolution Plan


A Resolution Applicant must submit information in accordance with the RFRP (Request for Resolution Plan) which is shared by RP after Coc’s approval along with the requirements set forth in the IBC, 2016 and CIRP Regulations. The applicant must sign and date each document in the place given therein and also sign each page of all documents. (The Resolution Applicant must submit any undertakings, authorizations, forms, documents, and information needed by Applicable Law and available in this RFRP.) Documents connected to the Resolution Plan should be signed in the manner specified in the relevant format of such document in this RFRP, either by the Resolution Applicant or an Authorized Representative of the Resolution Applicant. All requisite forms, documents, and authorizations must be signed and stamped by the Authorized Representative of the Resolution Applicant. (Each Resolution Applicant shall submit an affidavit in support of the IBC, 2016 related Undertaking, which should be certified and notarized by a notary public.) A Resolution Applicant should give the requested information to prove the Resolution Applicant's competence and ability to manage and administer the company to the satisfaction of the CoC. Strict adherence to forms, documentation, or authorizations stipulated in the RFRP is needed. Where information is sought in specified forms/documents/authorizations, the Resolution Applicant must refrain from using any brochures/pamphlets. Non-compliance with forms, documentation, or authorizations, as well as the submission of inadequate material, may result in the Resolution Plan being declared non-responsive. Each form, paper, or authorization must be signed by the Resolution Applicant and correctly stamped / corporate seal affixed.


Mandatory contents of the Resolution Plan

The Resolution Applicant is responsible for preparing the Resolution Plan in compliance with the IBC, the CIRP Regulations (as amended to date), and this RFRP. According to Section 30 of the IBC, 2016 and Regulations 38 and 39 of the CIRP Regulations, the Resolution Applicant must include the following in the plan:

 

  • Information and details, along with affidavit, of the Resolution Applicant and all “connected persons” (as defined under Section 29A of IBC, 2016 );
  • Specific sources of funds that shall be used for the payment of the Insolvency Resolution Process Cost in priority to the repayment of any other debts of the Company to the satisfaction of the COC;
  • Specific sources of funds that shall be used for the payment of the Operational Creditors in priority over financial creditors
  • Term of the Resolution Plan and its implementation schedule
  • Stipulate mechanism regarding management and control of the affairs of the Company post the approval of the Resolution Plan by the Adjudicating Authority and post the Transfer Date
  • Manner of implementation and supervision of the Proposed Transaction
  • Declaration to the effect that the Resolution Plan is not in contravention of provisions of the Applicable Law
  • All conditions stated under Section 30 of IBC, 2016 and Regulation 38 of the CIRP Regulations are satisfied to the effect and
  • Resolution Plan conforms to the requirements as specified by the IBBI

The Applicant shall, in accordance with the IBC and the CIRP Regulations, in particular Regulation 38 thereof, provide in the plan, all such details in the Resolution Plan, including but not limited to those mentioned in this RFRP document, which shall be required to assess the viability and feasibility of the plan by the Committee of Creditors.


Source Link: https://www.resurgentindia.com/resolution-plan-meaning-content-drafting-and-submission

Comments

Post a Comment

Popular posts from this blog

Investment Banking Firm – Overview, Functions and Benefits

Image
  What is investment banking? Investment banking is a separate division of the financial sector that arranges debt and deals in securities for all types of corporate organizations. Additionally, it is also responsible for providing other services such as financial advisory services and mergers and acquisitions etc. In simple words, we can sum up that investment banking firm work as a mediator between the corporates looking forward to expanding their business and potential investors. In modern times the financial needs of business owners have increased tremendously. On top of that, handling such large finances requires the assistance of experts such as investment bankers. Thus investment banks come to the rescue of such people with huge capital needs and help them run their businesses smoothly. Overview of investment banking firm. While a commercial bank is essential in handling the day to day financial needs of the people/ entrepreneurs and provides the credit requirements, an inv...
Read more

Navigating Intellectual Property Valuation: A Guide for Business Owners

Image
  Intellectual property  refers to intangible assets such as logos, brand names, patents, trademarks, copyrights, and trade secrets, which are unique identifiers for a company or its products and services. The process of evaluating the economic value of these assets is called  Intellectual Property valuation . Accurately valuing an  intellectual property  is crucial for determining a company's overall worth, as these assets are often its most valuable.   An IP asset must have the following criteria in order to be quantifiable: The holder or user of  intellectual property  should receive tangible financial benefits from its possession. This means that the property should have a quantifiable impact on the financial performance of the holder or user. Additionally, the existence of  intellectual property  should enhance the value of other related assets. This highlights the importance of considering the interplay between  intellectual p...
Read more

Pitch Deck Services for an Investment Round

Image
  A  pitch deck  is a brief presentation providing potential investors with an overview of your firm. A  pitch deck  is often called a start-up or an  investor pitch deck .  An effective pitch deck needs to be geared to the audience and the forum in which it is being presented. Products, business models, introduction to the team, your monetization plan, financial estimates, and so on are all important components of a  pitch deck presentation . Establishing a business's credibility is one of the most vital functions of a pitch deck.  Building credibility is also essential to continuing the conversation because, in the majority of cases, this is your first interaction with investors. The  investor pitch deck  becomes a powerful instrument for businesses to acquire funding if it is immaculate and presents a captivating and intriguing story about your business ideas.   Key elements of a pitch deck:   A...
Read more