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TMI BlogInsertion of new Chapter III-AX X X X Extracts X X X X X X X X Extracts X X X X ..... e years preceding the initiation date; (b) it is not undergoing a corporate insolvency resolution process; (c) no order requiring it to be liquidated is passed under section 33; (d) it is eligible to submit a resolution plan under section 29A; (e) the financial creditors of the corporate debtor, not being its related parties, representing such number and in such manner as may be specified, have proposed the name of the insolvency professional to be appointed as resolution professional for conducting the pre-packaged insolvency resolution process of the corporate debtor, and the financial creditors of the corporate debtor, not being its related parties, representing not less than sixty-six per cent. in value of the financial debt due to such creditors, have approved such proposal in such form as may be specified: Provided that where a corporate debtor does not have any financial creditors, not being its related parties, the proposal and approval under this clause shall be provided by such persons as may be specified; (f) the majority of the directors or partners of the corporate debtor, as the case may be, have made a declaration, in such form as may be specified, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch reports and other documents, with the Board, as may be specified; and (c) perform such other duties as may be specified. (2) The duties of the insolvency professional under sub-section (1) shall cease, if,- (a) the corporate debtor fails to file an application for initiating pre-packaged insolvency resolution process within the time period as stated under the declaration referred to in clause (f) of sub-section (2) of section 54A; or (b) the application for initiating pre-packaged insolvency resolution process is admitted or rejected by the Adjudicating Authority, as the case may be. (3) The fees payable to the insolvency professional in relation to the duties performed under sub-section (1) shall be determined and borne in such manner as may be specified and such fees shall form part of the pre-packaged insolvency resolution process costs, if the application for initiation of pre-packaged insolvency resolution process is admitted. Application to initiate pre-packaged insolvency resolution process. 54C. (1) Where a corporate debtor meets the requirements of section 54A, a corporate applicant thereof may file an application with the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-packaged insolvency commencement date. (3) Where no resolution plan is approved by the committee of creditors within the time period referred to in sub-section (2), the resolution professional shall, on the day after the expiry of such time period, file an application with the Adjudicating Authority for termination of the pre-packaged insolvency resolution process in such form and manner as may be specified. Declaration of moratorium and public announcement during prepackaged insolvency resolution process. 54E. (1) The Adjudicating Authority shall, on the pre-packaged insolvency commencement date, along with the order of admission under section 54C- (a) declare a moratorium for the purposes referred to in sub-section (1) read with sub-section (3) of section 14, which shall, mutatis mutandis apply, to the proceedings under this Chapter; (b) appoint a resolution professional- (i) as named in the application, if no disciplinary proceeding is pending against him; or (ii) based on the recommendation made by the Board, if any disciplinary proceeding is pending against the insolvency professional named in the application; (c) cause a public announcement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Board of Directors and committee of directors, or partners, as the case may be, of the corporate debtor; (e) appoint accountants, legal or other professionals in such manner as may be specified; (f) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor and the existence of any transactions that may be within the scope of provisions relating to avoidance of transactions under Chapter III or fraudulent or wrongful trading under Chapter VI, including information relating to- (i) business operations for the previous two years from the date of pre-packaged insolvency commencement date; (ii) financial and operational payments for the previous two years from the date of pre-packaged insolvency commencement date; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (g) take such other actions in such manner as may be specified. (4) From the date of appointment of the resolution professional, the financial institutions maintaining accounts of the corporate debtor shall furnish all information relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damage. (3) No person shall be liable under sub-section (2), if the list of claims or the preliminary information memorandum was submitted by the corporate debtor without his knowledge or consent. (4) Subject to section 54E, any person, who sustained any loss or damage as a consequence of omission of material information or inclusion of any misleading information in the list of claims or the preliminary information memorandum shall be entitled to move a court having jurisdiction for seeking compensation for such loss or damage. Management of affairs of corporate debtor 54H. During the pre-packaged insolvency resolution process period,- (a) the management of the affairs of the corporate debtor shall continue to vest in the Board of Directors or the partners, as the case may be, of the corporate debtor, subject to such conditions as may be specified; (b) the Board of Directors or the partners, as the case may be, of the corporate debtor, shall make every endeavour to protect and preserve the value of the property of the corporate debtor, and manage its operations as a going concern; and (c) the promoters, members, personnel and partners, as the case may be, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) section 17; (c) clauses (e) to (g) of section 18; (d) sections 19 and 20; (e) sub-section (1) of section 25; (f) clauses (a) to (c) and clause (k) of sub-section (2) of section 25; and (g) section 28, shall, mutatis mutandis apply, to the proceedings under this Chapter, from the date of the order under sub-section (2), until the pre-packaged insolvency resolution process period comes to an end. Consideration and approval of resolution plan. 54K. (1) The corporate debtor shall submit the base resolution plan, referred to in clause (c) of sub-section (4) of section 54A, to the resolution professional within two days of the pre-packaged insolvency commencement date, and the resolution professional shall present it to the committee of creditors. (2) The committee of creditors may provide the corporate debtor an opportunity to revise the base resolution plan prior to its approval under sub-section (4) or invitation of prospective resolution applicants under sub-section (5), as the case may be. (3) The resolution plans and the base resolution plan, submitted under this section shall conform to the requirements referred to in sub-sections (1) and (2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the resolution plan selected under sub-section (9) is not considered for approval or does not fulfil the requirements of sub-section (10), it shall compete with the base resolution plan, in such manner and subject to such conditions as may be specified, and one of them shall be selected for approval under sub-section (12). (12) The resolution plan selected for approval under sub-section (10) or sub-section (11), as the case may be, may be approved by the committee of creditors for submission to the Adjudicating Authority: Provided that where the resolution plan selected for approval under sub-section (11) is not approved by the committee of creditors, the resolution professional shall file an application for termination of the pre-packaged insolvency resolution process in such form and manner as may be specified. (13) The approval of the resolution plan under sub-section (4) or sub-section (12), as the case may be, by the committee of creditors, shall be by a vote of not less than sixty-six per cent. of the voting shares, after considering its feasibility and viability, the manner of distribution proposed, taking into account the order of priority amongst creditors as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter. (3) Where the Adjudicating Authority is satisfied that the resolution plan does not conform to the requirements referred to in sub-section (1), it may, within thirty days of the receipt of such resolution plan, by an order, reject the resolution plan and pass an order under section 54N. (4) Notwithstanding anything to the contrary contained in this section, where the Adjudicating Authority has passed an order under sub-section (2) of section 54J and the resolution plan approved by the committee of creditors under sub-section (4) or sub-section (12), as the case may be of section 54K, does not result in the change in the management or control of the corporate debtor to a person who was not a promoter or in the management or control of the corporate debtor, the Adjudicating Authority shall pass an order- (a) rejecting such resolution plan; (b) terminating the pre-packaged insolvency resolution process and passing a liquidation order in respect of the corporate debtor as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1) of section 33; and (c) declaring that the pre-packaged insolvency resolution process costs, if any, shall be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, at any time after the pre-packaged insolvency commencement date but before the approval of resolution plan under sub-section (4) or sub-section (12), as the case may be of section 54K, by a vote of not less than sixty-six per cent. of the voting shares, may resolve to initiate a corporate insolvency resolution process in respect of the corporate debtor, if such corporate debtor is eligible for corporate insolvency resolution process under Chapter II. (2) Notwithstanding anything to the contrary contained in Chapter II, where the resolution professional intimates the Adjudicating Authority of the decision of the committee of creditors under sub-section (1), the Adjudicating Authority shall, within thirty days of the date of such intimation, pass an order to- (a) terminate the pre-packaged insolvency resolution process and initiate corporate insolvency resolution process under Chapter II in respect of the corporate debtor; (b) appoint the resolution professional referred to in clause (b) of sub-section (1) of section 54E as the interim resolution professional, subject to submission of written consent by such resolution professional to the Adjudicating Authority in such fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to section 54E ; (d) reference to resolution professional in sub-sections (1) and (4) of section 28 shall be construed as corporate debtor ; (e) reference to section 31 under sub-section (3) of section 61 shall be construed as reference to sub-section (1) of section 54L ; (f) reference to section 14 in sub-sections (1) and (2) of section 74 shall be construed as reference to clause (a) of sub-section (1) of section 54E ; (g) reference to section 31 in sub-section (3) of section 74 shall be construed as reference to sub-section (1) of section 54L . (2) Without prejudice to the provisions of this Chapter and unless the context otherwise requires, where the provisions of Chapters II, III, VI and VII are applied to the proceedings under this Chapter, references to- (a) insolvency commencement date shall be construed as references to pre-packaged insolvency commencement date ; (b) resolution professional or interim resolution professional , as the case may be, shall be construed as references to the resolution professional appointed under this Chapter; (c) corporate insolvency resolution process shall be construed as references to pre-p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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