Corporate Insolvency Resolution Process

Team LSA is providing various support services to its partners who have been appointed as Interim Resolution Professional or Resolution Professional in the Corporate Insolvency Resolution Process of any Corporate Debtor. Following support services are extended by different teams of LSA for efficient handling of Corporate Insolvency Resolution Process: –

Claim Verification

  • To issue Public Notice inviting Claims
  • To receive claims of financial creditors, operational creditors, workmen and employees, claims for statutory dues, etc
  • To collate claims and verify; seek further details, documents and explanations from claimants for the purpose of verification
  • To collate, verify and admit or reject claims with regards to category (secured or unsecured), priority,
  • determination and verification of security interest, inter-creditor arrangement over security interest, etc.
  • To constitute Committee of Creditors and file a requisite report to Adjudicating Authority

All the above jobs are also done for liquidation process for the Insolvency Professional appointed as liquidator in any matter. Similar services would also be provided in the case of Insolvency Resolution Process and Bankruptcy Process of Individuals, Proprietorship Concerns and Partnership Firms.

Taking Over Control and Custody of Corporate Debtor

Team LSA has a team of human resources, who are trained and experienced for taking over physical and virtual control over the operations and assets of the Corporate Debtor from the existing Key Managerial Personnel (KMPs) and to maintain its control over the operations of Corporate Debtor and to protect the assets and businesses of the Corporate Debtor.

Following is the process followed by the team for effective and timely control over the Corporate Debtor: –

  • To visit all or key locations of the businesses or assets of the Corporate Debtor and identify the locations and assets
  • To make an inventory of the assets or businesses of Corporate Debtor and make videos and take pictures for the purpose of records and presenting it before the Committee of Creditors members
  • To depute security guards at key entry and exit points to assure protection of assets and to prevent any fraudulent or unauthorized removal of property of the Corporate Debtor
  • To supervise the operations of Corporate Debtor and to do all such acts required for keeping the Corporate Debtor as a going concern.

All the above jobs are also done during the liquidation process for the Insolvency Professionals and are appointed as liquidator. Similar services would also be provided in the case of Insolvency Resolution Process and Bankruptcy Process of Individuals, Proprietorship Concerns and Partnership Firms.

Process Team

LSA has developed a team responsible for conducting various functions of Corporate Insolvency Resolution Process.

The following are the key jobs under this team: –

  • To communicate with all stakeholders such as Committee of Creditor’s members, 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 CIRP, coordinating for litigation.
  • To appoint professionals and experts for the process such as Registered Valuers for valuation of the assets of the Corporate Debtor; Transactional Auditors for determination of avoidable transactions u/s 43, 45, 50 and 66 of the Code; internal auditors, if approved; statutory auditors, if required and approved; industry expert, process consultant, if required; etc. and to get their fee approved from Committee of Creditors.
  • To maintain a panel of professionals after verification of key documents, antecedents and performance history for the purpose of their appointment for Corporate Debtors. LSA maintains a panel of advocates, industry experts, auditors, forensic auditors, registered valuers, media agencies, security service providers, etc.
  • To interact and coordinate with different professionals and experts appointed for the process and to provide the requisite information for completion of the job and to obtain their report.
  • To convene the Committee of Creditors meetings and to prepare all notices, agenda, information to be shared with COC, minutes, etc and to act as a bridge between Committee of Creditors and the Insolvency Professional.
  • To prepare and compile Information Memorandum and co-ordinate for all the information required. To keep the Information Memorandum updated with adding all that information which is important for understanding the Corporate Debtor for the purpose of submission of Resolution Plan.
  • To conduct the entire process of an invitation of Resolution Plans such as the release of Expression of Interest, preparation of RFRP, bid evaluation matrix, eligibility criteria and other documents for receipt, examination and presentation of Resolution Plans for the approval of Committee of Creditors.

Similar services would also be provided in the case of Insolvency Resolution Process of Individuals, Proprietorship Concerns and Partnership Firms.

Legal Team

LSA provides complete legal support for day to day guidance and for an understanding of various legal documents received along with the claims and other documents sourced from Corporate Debtor. Followings are the key supports provided by legal team to Insolvency Professionals: –

  • To provide in-house support as a legal associate of Insolvency Professionals for the efficient conduct of CIRP and Liquidation Process
  • To provide consultation on various provisions of Code and regulations made under the Code for conducting the CIRP and Liquidation Process
  • To co-ordinate and interact with Legal Counsel appointed for handling litigations initiated by Resolution Professional or any other person.
  • To draft progress reports and other documents required to be filed before the Adjudicating Authority or any other authority.
  • To read through notices, applications, petitions, replies, rejoinders, etc. drafted by appointed lawyers and provide comments
  • To appear before Adjudicating Authority or any other court, tribunal or authority in their cases

All the above jobs are also done during the liquidation process for the Insolvency Professionals and are appointed as liquidator. Similar services would also be provided in the case of Insolvency Resolution Process and Bankruptcy Process of Individuals, Proprietorship Concerns and Partnership Firms.

Finance and Accounts Team

LSA has developed a team and have trained them for various finance and accounts related jobs during CIRP and Liquidation Process for the purpose of providing support to Insolvency Professionals. Following are some of the jobs which can be highlighted for this team: –

  • To understand the financial position of the Corporate Debtor and to prepare a list of assets and liabilities up to the date of commencement of CIRP or liquidation and to present the same before COC or Stakeholders.
  • To analyze the financial statement of Corporate Debtor and various other financial and legal documents to understand the financial position, reasons for financial stress, remedies available, fund flow and cash flow of Corporate Debtor, the root cause of financial stress, etc.
  • To supervise the accounts and finance function of the Corporate Debtor and keep a close watch on the cash flow from operations and to maintain accounts for CIRP cost.
  • To co-ordinate with Internal auditors, statutory auditors and transactional auditors and provide them all the information to get timely reports from them.

All the above jobs are also done during the liquidation process for the Insolvency Professionals and who are appointed as liquidator. Similar services would also be provided in the case of Insolvency Resolution Process and Bankruptcy Process of Individuals, Proprietorship Concerns and Partnership Firms.

Resolution Plan Facilitator Team

The success of Insolvency Professionals during CIRP lies in resolving the case by finding a successful Resolution Applicant who could offer optimum value to stakeholders and would keep the Corporate Debtor as a going concern, thus providing much-wanted relief to workmen, employees, and other stakeholders. LSA has developed a separate team for this role and has trained them for following key deliverables for Insolvency Professionals: –

  • To understand the business of the Corporate Debtor, its financial position, assets and liabilities, capacity, product range, input profile, customer profile, fixed cost, variable cost, etc.
  • To collect and update data for various industry segments for Prospective Resolution Applicants
  • To prepare a teaser or brief profile for circulation to those having synergy with the business of the Corporate Debtor or for circulation to HNIs, prospective investors, funds, ARCs, etc.
  • To track all leads and develop them as prospective Resolution Applicants and provide them all the information required for preparation of Resolution Plan.
  • To meet Prospective Resolution Applicants and provide them comfort and develop them for submission of Resolution Plan.
  • To facilitate visits of Prospective Resolution Applicants for the inspection of business and assets of Corporate Debtor.

Liquidation Process

Insolvency Professionals who are 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. LSA 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 panel of professionals after verification of key documents, antecedents and performance history for the purpose of their appointment for Corporate Debtors. LSA maintains a panel of advocates, auditors, registered valuers, media agencies, security service providers, etc. to be used for the 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 the sale of assets, preparation of e-auction document, keep the virtual data room, verify the 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.

Similar services would also be provided in the case of Bankruptcy Process of Individuals, Proprietorship Concerns and Partnership Firms.

Asset Sale Team

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, LSA 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: –

  • 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, newspaper 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.

Similar services would also be provided in the case of Bankruptcy Process of Individuals, Proprietorship Concerns and Partnership Firms.