CIRP

A stationery supplier in Vashi has three months of unpaid invoices on a printing company in Navi Mumbai, and the owner has stopped taking calls. The supplier can file a recovery suit and wait for years, or it can ask a tribunal to put the company into a rescue process run by a court-appointed professional. The second route is the corporate insolvency resolution process, CIRP, and it is the centrepiece of the Insolvency and Bankruptcy Code. This topic follows one company through it, from the first default to the day the process ends.

In two minutes

CIRP is a time-limited, creditor-led rescue of a defaulting company or LLP: once the NCLT admits an application under section 7, 9 or 10, a moratorium begins, an insolvency professional takes over management, a committee of creditors makes the decisions, and a resolution plan approved by 66 per cent of the vote and by the NCLT binds everyone; if no plan is approved, liquidation follows.

The rest of this chapter

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