IBC · IBC · Chapter 8

Chapter 8 - Catalysing Successful Resolution Plan

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Insolvency and Bankruptcy Code 2016 — Insolvency and Bankruptcy Code 2016.

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Q

How does Section 5(26) of the IBC, 2016 define a 'resolution plan'?

A

A resolution plan is a plan proposed by a resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II of the Code.

Q

What is the minimum voting share of financial creditors required to approve a resolution plan under Section 30(4) of the IBC?

A

Not less than sixty-six per cent of voting share of financial creditors.

Q

What is the primary objective of a resolution plan under the IBC, 2016?

A

The primary objective is to resolve insolvency of the corporate debtor as a going concern, not to liquidate assets or recover individual debts.

Q

Under what statutory provision must a resolution plan provide for payment of CIRP costs in priority?

A

Section 30(2) of the Insolvency and Bankruptcy Code, 2016.

Q

Who is eligible to submit a resolution plan under the IBC, 2016?

A

A resolution applicant who meets the eligibility criteria prescribed under the Code and applicable regulations is eligible to submit a resolution plan.

Q

What was the CoC voting threshold for approving a resolution plan before the 2018 IBC amendment?

A

Seventy-five per cent of voting share of financial creditors.

Q

What does it mean to resolve a corporate debtor 'as a going concern' under the IBC?

A

Resolving as a going concern means the business continues to operate rather than being shut down or liquidated, preserving its economic value and employment.

Q

Under Section 33 of the IBC, what order does the Adjudicating Authority pass when no resolution plan is received or a plan is rejected?

A

An order to liquidate the corporate debtor and public announcement of liquidation.

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