When an entity has gone insolvent, it falls up to the Insolvency and bankruptcy Board of India, and the respective tribunals to resolve the issue of insolvency. Through the insolvency resolution process, the goal is to:
The Bodies Involved
Before we begin to look into the parties involved throughout the process:
These are the bodies involved.
The process of insolvency resolution involves the following process:
If a resolution is reached, then the company is sold on the market and the resultant profits are divided among the creditors.
If there is no resolution or the committee of creditor’s votes for the corporate debtor to be liquidated, then the corporate debtor’s assets are sold in order to repay the creditors.
The entire process starting from step has to be completed within a span of 180 days. However, the debtor can ask for an extension of about 90 days for a single time. However, this request needs to be approved by the Committee of Creditors.