Once an application for insolvency resolution has been submitted under section 9, IBC states that immediately after the appointment of an insolvency resolution professional, a public announcement has to be made. To that end, we are going to look into this matter of public announcement of corporate insolvency and try to answer any burning question that you might have.
When is the public announcement made?
After the initiation of the insolvency resolution process, when the interim resolution professional is appointed, then the public announcement is to be made right away. Furthermore, this announcement has to be made by the insolvency resolution professional himself.
What constitutes in the public announcement
The Public Announcement (from this point to be called PA) entails the following information
- Corporate debtor credentials: the name and the address of the corporate debtor whose insolvency is the reason of the initiation of the insolvency resolution process.
- Registering authority details: Credential of the authority (name of the authority) with which the corporate debtor is registered or incorporated.
- The last date of the submission of the claims.
- IP details: Details associated with the insolvency resolution professional who is going to responsible for conducting the insolvency resolution procedure.
- Penalties: If there are any false and misleading claims, then information about these claims along with the penalties given according to them is to be publicized as well.
- Date of IR closing: The closing date of the insolvency resolution process. The last date of insolvency resolution process shall be the 180th date from the initiation of the aforementioned process.
How to make the announcement
- The form to be used to made the announcement is to be Form A of the schedule
- The announcement is to be published:
- In one English language and one regional language newspaper. This newspaper should have a wide circulation at the corporate office or the principle office of the corporate debtor. Furthermore, the circulation should be in every place where, according to the resolution professional, the corporate debtor conducted business.
- If there is a website of the corporate debtor, the announcement should be made there as well.
- If there is a website specified for the purpose of public announcement, then there too, the public announcement is to be made.
- The announcement should provide the last date for submission of the proofs of claims by the operational/financial creditors. This date is to be 14 days from the appointment of the insolvency resolution professional.
As for the expenses of the public announcement, it is up to the applicant to bear them. However, the company of creditors can reimburse this expense to a particular cost.