Insolvency Resolution Process for Corporate Persons

 2019 IBC Amendment Bill - Insolvency and Bankruptcy

The Insolvency and Bankruptcy Code, 2016 (IBC) has been widely considered a landmark legislation that has brought about a paradigm shift in the recovery and resolution process.

However, during the implementation of the IBC over the past two years and eight months, several challenges have emerged, including:

  1. The Supreme Court recognises the utmost

Rights of Suspended Board - Vijay Kumar Jain v. Standard Chartered Bank

Upon commencement of the resolution process under the Insolvency and Bankruptcy Code, 2016 (Code), powers of the Board of Directors of the company stand suspended and are vested in and exercised by the resolution professional. While the directors are entitled to attend the meetings of the committee of creditors (COC) formed for the company, such directors have no voting rights.

A question arose over whether the directors should be given copies of the resolution plans and other confidential documents that the COC considers during the meetings. Sharing of such documents could be seen as in direct conflict with the obligations of the resolution professional to maintain confidentiality under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and other related regulations. More importantly, it could create positions of conflict between the suspended Board, who often submit resolution plans or are applicants under Section 12A, and the other participants. The Hon’ble Supreme Court in its recent judgment in Vijay Kumar Jain v. Standard Chartered Bank and Others[1] has, with great respect, left some questions unanswered.
Continue Reading Supreme Court on the Rights of Suspended Board in Vijay Kumar Jain v. Standard Chartered Bank: Some Implications