When a company has declared insolvency, then one of the first things in the sequence of the procedures is the appointment of a Resolution Professional for the Company.
The Committee of Creditors (CoC) appoints a Resolution Professional. To do it, they have to appoint 1 in the first meeting within 7 days of the development of CoC, where, 75 percent of the majority of voting shares from the Financial Creditors are required.
The Resolution Professional will become responsible for the work to put forward the entire Corporate Insolvency Resolution (CIR) processes and manages the operations of the Corporate debtor. From the time of appointment, only the RP can send notices and conduct all the meetings further after his appointment.
Q: What is the 1st date, a resolution plan be passed, from the date of appointment of an RP?
A: According to Sec 39, the RP shall submit the resolution plan, that is approved by the CoC, at least 15 days before the last date of the expiry of the tax period. But this is not applicable to an ongoing CIR process that has completed its 130th day from its commencement date. About the further extension from the expiry date, it can be extended to 180 days as under Sec 12 and may further be extended to 90 more days by way of an application made by the RP.
The invitations for such resolution plans have to be made at least thirty days before the last date of submission of the resolution plans, under Sec 36A. The timelines can not apply to these regulations in an ongoing CIR process.
Only the CoC can decide the last date of the submission of the resolution plan and also has the power to extend it as situation demands.
Q: Roles and duties of the RP, pertaining to the report of the valuer.
A: Pertaining to the report of the valuer, the RP has the duty to
- represent and act on the behalf of the corporate debtor with the other third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial or arbitration proceedings
- invite prospective lenders, investors, and any other persons to put forward resolution plans
- have an authority to do all acts and to execute, in the name and on behalf of the corporate debtor, all deeds, receipts, and other documents, and for the given purpose to use, when necessary, the seal of the corporate debtor, if any
- to maintain an updated list of claims under Sec 25.
The Resolution Professionals will also have a responsibility to check on,
- Should examine whether the resolution plan provides for the payment of insolvency resolution process costs in a manner as may be specified by the Board in priority to the repayment of the other debts of the debtor
- Issuing an invitation, including the evaluation matrix, to the prospective resolution applicants according to clause (h) of (2) of Sec 25 to submit the resolution plans at least 30 days before the actual submission date as prescribed.