Liquidation under IBC, 2016

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.

Winding up of business

Under Insolvency and Bankruptcy Code, 2016

A solvent Company who certifies its solvency by an affidavit of majority of directors of the Company may opt for this method for winding up/ dissolution of the Corporate Debtor. Members in its general meeting by special resolution may commence process of voluntary liquidation of the Company by appointing an Insolvency Professional registered with the IBBI as liquidator of the Company at fees to be decided by the Company.

Liquidator makes public announcement declaring that the Company is into liquidation and any stakeholders may file their claim within 30 days from the liquidation commencement date. Liquidator will verify the claims and prepare list of stakeholders. Liquidator will further inform to all government authorities where Company is registered and get NOC from all all registered Govt. authorities.

After settling claims of all stakeholders from the proceeds of assets of the Corporate Debtor, Liquidator may file application for dissolution before NCLT and once NCLT is satisfied that procedures laid down in the act has been complied with, may order for dissolution of the Corporate Debtor. Dissolution order so passed will be intimated to ROC who strike off the name of the Company from its record.

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