Resolution Plans to Subsume Statutory Dues?

By Shikha Bansal & Richa Saraf (resolution@vinodkothari.com)

The Insolvency and Bankruptcy Code, 2016 facilitates drawing up resolution plans for corporate debtors who has defaulted in making payment to its creditors. The resolution plan is approved by a committee of creditors consisting of a class of creditors (called financial creditors) of the corporate debtor. The resolution plan, once approved and sanctioned by the adjudicating authority, becomes binding on all the stakeholders of the company including dissenting financial creditors and operational creditors. As such, it assumes the nature of a contract framed under a statute. However, the question before us is whether a class of creditors can approve a resolution plan which seeks to extinguish statutory liabilities of the corporate debtor. Read more

Resolution Professional vis-à-vis Board of Directors: Governance of Insolvent Companies

– By Shikha Bansal (resolution@vinodkothari.com)

The Securities and Exchange Board of India (“SEBI”) has issued a “Discussion Paper on Compliance with SEBI Regulations by Listed Entities undergoing Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016”[1] on 28th March, 2018. The Discussion Paper proposes certain modifications in the applicable regulatory framework to facilitate insolvency resolution of listed corporate debtors  while  at  the  same  time  ensuring  that  the  interests  of  investors  in securities of such corporate debtors are protected. Read more