The corporate insolvency framework under the Insolvency and Bankruptcy Code, 2016 (Code), puts in place a two-stage process first attempts revival of a defaulting corporate entity, failing which, it is to be swiftly liquidated. The Code prescribes objective grounds for liquidation of a corporate debtor.
The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were drafted to put in place the subordinate legislation pertaining to the liquidation process under the Code.
These Regulations lay down a detailed, step-by-step process to enable an efficient liquidation process that achieves maximum value from the sale of the debtor’s and distribution of proceeds. They provide for the appointment of a regulated insolvency professional as the liquidator, who is to oversee the liquidation process, collect claims and file progress reports with the Adjudicating Authority.
The Regulations outline the eligibility conditions for appointment of an insolvency professional as a liquidator and stipulates rules for determination of her fee.
They also prescribe the methodology for determining the costs of the liquidation process, and detail the methods for sales, realisation of assets, and the distribution of proceeds in accordance with the distribution waterfall specified under the Code.
About the Contributors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School.
He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Shreya was a Research Fellow at Vidhi.