IBC-CODE-2016

The Insolvency and Bankruptcy Code 2016 By CA Rajesh Donkeshwar [email protected] Date:10/5/18

IBC code – over view Insolvency precedes bankruptcy and liquidation follows Insolvency Bankruptcy bankruptcy. Liquidation. Insolvency warnings:2 www.sbsandco.com • drop in sales • delay in payments • Increasing reliance on credit Cash flow test: • when cash flow IN s less than cash flow OUT flow.

Definition of Insolvency and BankruptcyBlack’s law dictionary defines the following: InsolvencyThe condition of a person who is insolvent; inability to pay one’s debts; lack of means topay one’s debts. Such a relative condition of a man’s assets and liabilities that the former,if all made immediately available, would not be sufficient to discharge the latter. Or thecondition of a person who is unable to pay his debts as they fall due, or in the usual courseof trade and business. BankruptcyThe state or condition of one who is a bankrupt; amenability to the bankruptcy laws; thecondition of one who has committed an act of bankruptcy, and is liable to be proceededagainst by his creditors therefore, or of one whose circumstances are such that he isentitled, on his voluntary application, to take the benefit of the bankruptcy laws.3 www.sbsandco.com

Various laws for Insolvency and Bankruptcy Corporates  1956 – Companies Act, 1956  1985 – Sick Industrial Companies (Special Provisions) Act – SICA  1993 – Recovery of Debts Due to Bank and Financial Institutions Act – RDDB  2002 – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act – SARFAESI  2013 – Companies Act – Chapter XIX & XX  2016 –The Insolvency and Bankruptcy Code – IBC Individuals  1909 – Presidency Towns Insolvency Act  1920 – Provincial Insolvency Act  1932 – Partnership Act4 www.sbsandco.com

So many Acts -what is the requirement of IBC EASE OF DOING BUSINESS RECOVERY RATE % RANK 2016 100 88.6 81.5 89.7 87.3 82.1 80150 13612090 6060 13 27 16 14 55 44 55 38 40 41.3 36.2 35.330 22.5 25.7 5 0 20 UK 0 USA Singapore UK Canada USA Australia Singapore Brazil Canada Russia Australia India Brazil China Russia South India Africa China South Africa TIME (YEARS) • As per the Ease of Doing business index 2016 released5 4 4.3 by World Bank, India continues to fare the worst4 amongst the BRICS nation.3 1.5 2 1.7 2 • With 136th rank, India is far behind the developed 0.8 0.82 1 1 economies such as UK, US, and others.1 • Among several requisites of an effective insolvency0 UK regime, recovery is one of the most important USA Singapore parameters. Canada • At 25.7 cents per dollar, India is ahead only of Brazil Australia Brazil amongst BRICS nation. Russia India China South…5 www.sbsandco.com

IBC code – Requirement  Improve ‘Ease of Doing Business’ ranking for India.  Address the stressed assets over Rs 10 lakh crores (~15% of gross advances)  Heightened focus on the resolution of the problem by the Reserve Bank of India (RBI) and the Supreme Court.  There is a dire need of capital today – not just for stressed companies but for growth in general.  Doing away with a fragmented framework.  Long time for resolution and recovery  The average life of cases recommended for restructuring in 2002 was 7 years and the average life of cases recommended for winding up to the court was 6.5 years.  Improve the confidence of the International investor in the debt market.6 www.sbsandco.com

Consolidation of various laws –IBC Code CA 1956Provincial SICA, 1985InsolvencyAct, 1920 IBC 2016 Presidency CA 2013 Towns Insolvency Act, 19097 www.sbsandco.com

Journey of IBC code 2016 Mandate of BLRC  Setup by the Department of Economic Affairs, MoF, through office order dated August 22, 2014  Chairman: Mr. T.K. Vishwanathan Objective of BLRC  To study the framework of Corporate bankruptcy in India  To submit a report to the government for reforming the system Reports  Interim Report (February 2015)  Served as an approach paper for the proposed new Code  Reforms suggested for improving the insolvency regime in India  Final Report (November 2015)  Volume I: Rationale and Design model of the Code  Volume II: Draft Insolvency and Bankruptcy Code8 www.sbsandco.com

Journey of IBC code 2016 21.12.2015- IBC Bill of 2015 -introduced in LS 23.12.2015 - IBC Bill of 2015 - Referred to Joint Committee of both Houses of Parliament 28.04.2016- IBC Bill of 2015 -Joint Committee placed its Report to both Houses of Parliament 05.05.2016- IBC Bill of 2015 -passed by LS 11.05.2016- IBC Bill of 2015 -passed by RS 28.05.2016- IBC, 2016 -Assented by President of India & Notified9 www.sbsandco.com

IBC code – Preamble  An Act to consolidate and amend laws relating to : reorganization and insolvency resolution of corporate persons, partnership firms and individuals -in a time bound manner for (i) maximization of value of assets of such persons, (ii) to promote entrepreneurship, (iii) availability of credit, and (iv) balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues, and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.10 www.sbsandco.com

shift of control from debtor to creditor Debtor in Control Creditor in ControlControl and custody of assets continue to vest with  The IBC proposes a Creditor in Controldebtors even in the event of a debt default. scenarioPromoters continue to stay in control with limited  Once a default occurs, it is the Committee ofrights to creditors except for secured financial Creditors who are empowered to make acreditors who have the right to repossess assets of decisionthe defaulter  Committee of creditors is constituted toDebtor in possession presents the following issues : comprise all the financial creditors of the enterpriseEmphasis on secured credit onlySME’s are starved of credit because they are unable  All decisions of the CoC is by 75% majorityto provide collaterals  Voting share is based on value of debt owing toDebtor in possession is also faught with possibilities the creditorof mishandling of assets of the enterprise bypromoters11 www.sbsandco.com

IBC code – Infrastructure Insolvency and Bankruptcy Board (IBB) In the lines of CBDTNCLT – The Adjudicating authority (AA) CBIE Insolvency Agencies Information Utilities (IUs) Insolvency Professionals (IPs) Committee Insolvent entity of Creditors (CoC) Insolvency Agencies: Indian Institute of Insolvency Professionals of ICAI IIIP-ICAI. ICSI Institute of Insolvency Professionals12 Insolwvwenwc.sybPsarnodfceos.scioomnal Agency of Institute of Cost Accountants of India

IBC code – Infrastructure  IBB – apex body for promoting transparency & governance in the administration of the IBC; will be involved in setting up the infrastructure and accrediting IPs & IUs.  IUs - Centralised repository of financial and credit information of borrowers; would validate the information and claims of creditors vis-à-vis borrowers, as needed.  IPAs- professional bodies registered by the Board to promote and regulate the insolvency profession; these bodies will enrol Ips  IPs- Licensed private professionals regulated by the Board; will conduct resolution process; to act as Liquidator/bankruptcy trustee; appointed by creditors and override the powers of board of directors.  Adjudicating Authority (AA) - would be the NCLT for corporate insolvency; to entertain or dispose any insolvency application, approve/ reject resolution plans, decide in respect of claims or matters of law/ facts thereof.  CoC- consists of financial creditors to who will appoint and approve actions of IPs13 www.sbsandco.com

IBC code – structure of the code Insolvency Bankruptcy code 2016Rules Regulations Circulars Notifications Orders Section 239: Rules can be made by Central Govt. on matters stated in Section 239 (a) to (zn) (forty matters). Section 240: Regulations can be made by IBBI (Insolvency and Bankruptcy Board of India) on matters stated in Section 240 ((a) to (zzzc) (eighty one matters).14 www.sbsandco.com

IBC code - Five PartsPart I Part II Part III Part IV Part V 7 Chapters Repeal amendment,• Short title , extent, • 7 chapters • 7 chapters Regulation of Transitional provisions, definition • CIRP, • Applicable to • Liquidation, IBBI Empowerment 11• Section 1-3 • Fast Track CIR, individuals and firms IPA, schedules • Voluntary • Fresh start process IP • Bankruptcy order for IU, Section : 224-255 Liquidation Inspection and • Adjudicating individuals Investigation • Distribution of estate Finance and accounts Authority • Adjudicating • Offences and Section 188-223 authority Penalties • Offences and • Section 4-77 penalties • Section 78-18615 www.sbsandco.com

IBC Code - Rules  Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.  Insolvency and Bankruptcy Board of India (Salary, Allowances and other Terms and Conditions of Service of Chairperson and members) Rules, 2016.16 www.sbsandco.com

IBBI - Regulations  IBBI (Model Bye- Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016  IBBI (Insolvency Professional Agencies) Regulations, 2016  IBBI(Insolvency Professionals) Regulations, 2016  IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016  IBBI (Liquidation Process) Régulations, 2016  Insolvency and Bankruptcy Board of India (Engagement of Research Associates and Consultants) Regulations, 2017  Insolvency and Bankruptcy Board of India (Procedure for Governing Board Meetings) Regulations, 2017  Insolvency and Bankruptcy Board of India (Advisory Committee) Regulations, 2017  Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 201717 www.sbsandco.com

IBBI - Regulations  Insolvency and Bankruptcy Board of India (Voluntary liquidation Process) Regulations, 2017.  Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.  Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017.18 www.sbsandco.com

IBC code – Applicability  Applies to whole of India  Except for Part III [J&K excluded] . Act doesn’t not apply to individuals , partnership firms who are residing in J&K.  Persons covered  Companies incorporated under the Companies Act, 2013  Companies governed by any special Act, to the extent the provisions are consistent with that Act;  LLPs  Any other body corporate, incorporated under any Act for the time being in force, as the Central Government may specify  Partnership firms  Individuals  Financial entities - Not covered19 www.sbsandco.com

CIRP – who can initiate CIRP initiationBy Financial By operational By Corporate Creditor Creditor debtor himself Section -7 Section -8 Section -1020 www.sbsandco.com

CIRP – who can initiate Who Can Initiate corporate insolvency resolution process.  Where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process  A financial creditor either by itself or jointly with other financial creditors may file an application against a corporate debtor before the Adjudicating Authority when a default has occurred.21 www.sbsandco.com

IBC code – Definitions  Corporate debtor: \"corporate debtor\" means a corporate person who owes a debt to any person;  Financial Creditor: Any person to whom Financial debt is owed and includes a person to whom such debt is legally assigned or transferred.  financial debt\" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money .  Operational Creditor: Any person to whom operational debt is is owed and includes a person to whom such debt is legally assigned or transferred.  Debt : means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt;  Default: \"default\" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the case may be;  corporate applicant\" means—  (a) corporate debtor; or (b) a member or partner of the corporate debtor who is authorized to make  an application for the CIRP under the constitutional document of the corporate debtor; or (c) an individual who is in charge of managing the operations and resources of the corporate debtor; or (d) a person who has the control and supervision over the financial affairs of the corporate debtor;22 www.sbsandco.com

CIRP Process Application • Application by Financial debtor or operational debtor upon default and • AA admits or rejects with in 14 days Admission • AA declares moratorium. Appoints IRP IRP • IRP makes a public announcement about CIRP COC • Management of affairs by IRP • After receiving claims, IRP constitutes COC and decides voting share • COC shall with 7 days shall meet appoint IRP as RP or replace another RP with IRP • RP shall conduct all meeting of COC • RP will manager the affairs of corporate debtor RP • Prepare Information memorandum and seek LOI from corporate applicants Resolution • >75% of COC approves, such resolution plan shall be submitted to AA • If AA satisfies , approves Resolution plan. • Resolution shall be completed within 2 years • If not , shall go for liquidation • If COC approves liquidation and AA satisfies and approves liquidation, then RP shall go for23 www.sbsandco.cloiqmuidation.

Time limit for completion of CIRP24 www.sbsandco.com

Application by Corporate Creditor –Section 9  An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.  The corporate debtor shall, within a period of ten days of the receipt of the demand notice bring to the notice of the operational creditor— existence of a dispute / suit/ arbitration  After the expiry of the period of ten days if the operational creditor does not receive payment from the corporate debtor or notice of the dispute the operational creditor may file an application  Can propose a IP to act as an IRP.  Adjudicating authority with in 14 days shall Accept or reject the application. In case of any defect shall give notice to rectify with in 7 days of receipt of such notice.25 www.sbsandco.com

Application by Corporate Applicant –Section 10  Where a corporate debtor has committed a default, a corporate applicant thereof may file an application for initiating CIRP with the Adjudicating Authority.  the RP proposed to be appointed as an IRP.  The Adjudicating Authority shall, within a period of fourteen days of the receipt of the application, by an order—  (a) admit the application, if it is complete; or  (b) reject the application, if it is incomplete:  Provided that Adjudicating Authority shall, before rejecting an application, give a notice to the applicant to rectify the defects in his application within seven days from the date of receipt of such notice  The CIRP shall commence from the date of admission of the application.26 www.sbsandco.com

Moratorium and Public announcementMoratorium • AA After admission of application under section 7,9,10 • declare moratorium by order • Cause public announcement • Appoint an IRPAppointment of • IRP call for submission of claims under section 15 IRP • The public announcement shall be made by the IRP Public mentioning the last date of submission of claims etc.announcement27 www.sbsandco.com

Moratorium – Section 14  Objective:  Maximizing value of the Entity to Continue Operation  No additional stress on Business AA shall by order declare moratorium from prohibiting all of the following  institution / continuation /proceedings against the corporate debtor  transferring, encumbering, alienating or disposing of its assets /legal right /beneficial interest therein;  any action to foreclose, recover or enforce any security interest created in respect of its property under the SARFAESI Act, 2002  the recovery of any property by an owner or lessor where such property is occupied  The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.  The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process:  the moratorium shall cease to have effect if AA approves the resolution plan /passes an order for liquidation of corporate debtor.28 www.sbsandco.com

Appointment and tenure of IRP- Section 16  The AA shall appoint an IRP within fourteen days from the insolvency commencement date.  Where the application is made by a financial creditor or the corporate debtor, the IP proposed respectively shall be appointed as the IRP,  Where the application made by an operational creditor and— no proposal for an IRP is made, the Adjudicating Authority shall make a reference to the Board for the recommendation of an insolvency professional who may act as an IRP;  The Board shall, within ten days of the receipt of a reference, recommend the name of an insolvency professional to the Adjudicating Authority  The term of the IRP shall not exceed thirty days from date of his appointment.29 www.sbsandco.com

Management of affairs by IRP- section 17 From the date of appointment of the IRP  the management of the affairs of the corporate debtor shall vest in the IRP;  the powers of the board of directors or the partners shall stand suspended and be exercised by the IRP.  The financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the IRP  The IRP vested with the management of the corporate debtor shall—  (a) act and execute in the name and on behalf of the corporate debtor all deeds, receipts, and other documents, if any;  (c) have the authority to access the electronic records of corporate debtor from information utility having financial information of the corporate debtor;  (d) have the authority to access the books of account, records and other relevant documents of corporate debtor available with government authorities, statutory auditors, accountants and such other persons as may be specified.30 www.sbsandco.com

Duties of IRP- section 17 The IRP shall perform the following duties, namely:—  collect all information relating to the assets, finances and operations of the corporate debtor  receive and collate all the claims submitted by creditors to him.  monitor the assets of the corporate debtor and manage its operations until a RP is appointed by the COC;  file information collected with the information utility, if necessary; and  take control and custody of any asset over which the corporate debtor has ownership rights  to perform such other duties as may be specified by the Board.  shall make every endeavor to protect and preserve the value of the property and manage the operations as a going concern  shall after collation of all claims received against the corporate debtor and determination of the financial position of the corporate debtor, constitute a COC31 www.sbsandco.com

Formation of COC – section 21.  The COC shall comprise all financial creditors  Related party to whom a corporate debtor owes a financial debt shall not have any right of representation, participation or voting in a meeting of the COC.  Where two or more financial creditors as part of a consortium or agreement, each such financial creditor shall be part of the COC and their voting share shall be determined accordingly.  Where the terms of the financial debt as part of a consortium arrangement provide for a single trustee or agent to act for all financial creditors, each financial creditor may authorize the trustee or agent to act on his behalf in the COC to the extent of his voting share;  All decisions of the COC shall be taken by a vote of not less than seventy-five per cent of voting share of the financial creditors:  The COC shall have the right to require the RP to furnish any financial information and the RP shall make available any financial information within a period of seven days of such requisition.32 www.sbsandco.com

Appointment of RP  The first meeting of the COC shall be held within seven days of the constitution of the COC.  The COC, may, in the first meeting, by a majority vote of not less than seventy-five per cent. of the voting share of the financial creditors, either resolve to appoint the IRP as a RP or to replace the IRP by another RP.  Where the COC resolves to continue IRP as RP , it shall communicate its decision to the IRP, the corporate debtor and the Adjudicating Authority; or  to replace the IRP, it shall file an application before the Adjudicating Authority for the appointment of the proposed RP  The Adjudicating Authority shall forward the name of RP to the Board for its confirmation and shall make such appointment after confirmation by the Board.  Where the Board does not confirm the name of the proposed RP within ten days of the receipt ,IRP to continue to function as the RP until such time as the Board confirms the appointment of the proposed RP.33 www.sbsandco.com

Function of Resolution Professional –Section 23  RP shall conduct the entire CIRP and manage the operations of the corporate debtor during the CIRP period.  The RP shall exercise powers and perform duties as are vested or conferred on the IRP under this Chapter.  The RP shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Board for formulating a resolution plan.  The RP shall provide to the resolution applicant access to all relevant information34 www.sbsandco.com

Meeting of COOC –Section 23  All meetings of the COC shall be conducted by the resolution professional.  The resolution professional shall give notice of each meeting of the committee of creditors  operational creditors, may attend the meetings of committee of creditors, but shall not have any right to vote in such meetings:  Any creditor who is a member of the committee of creditors may appoint an insolvency professional other than the resolution professional to represent such creditor  Each creditor shall vote in accordance with the voting share assigned to him based on the financial debts owed to such creditor.  The resolution professional shall determine the voting share to be assigned to each creditor in the manner specified by the Board.35 www.sbsandco.com

Duties of Resolution Professional –Section -25  to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor.  take immediate custody and control of all the assets of the corporate debtor, including the business records of the corporate debtor;  represent and act on behalf of the corporate debtor with third parties, in judicial, quasi-judicial or arbitration proceedings;  raise interim finances subject to the approval of COC  appoint accountants, legal or other professionals in the manner as specified by Board;  maintain an updated list of claims;  convene and attend all meetings of the committee of creditors;  prepare the information memorandum in accordance with section 29;  invite prospective lenders, investors, and any other persons( resolution Applicants) to put forward resolution plans;  present all resolution plans at the meetings of the committee of creditors for their consideration.36 www.sbsandco.com

Resolution plan – Section 30  A resolution applicant may submit a resolution plan  The RP shall examine each resolution plan received by him to confirm that each resolution plan—  (a) provides for the payment of insolvency resolution process costs  (b) provides for the repayment of the debts of operational creditors  (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) the implementation and supervision of the resolution plan;  The RP shall present to the COC for its approval  The COC may approve a resolution plan by a vote of not less than seventy five per cent. of voting share of the financial creditors.  The resolution applicant may attend the meeting of the COC in which the resolution plan of the applicant is considered:  The RP shall submit the resolution plan as approved by the COC to the Adjudicating Authority.37 www.sbsandco.com

Approval of Resolution plan –Section 31  If Adjudicating Authority is satisfied that the resolution plan as approved by the COC ,meets the requirements it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan.  Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan.  After the order of approval under sub-section (1),—  a) the moratorium order passed by the AA under section 14 shall cease to have effect; and  (b) the RP shall forward all records relating to the conduct of the CIRP and the resolution plan to the Board to be recorded on its database.38 www.sbsandco.com

Liquidation – Process.Trigger Event: RP should be appointed Liquidator to identify the Liquidator to collect-CoC does not agree on as the liquidator by assets of the corporate claims from creditorsRP NCLT, debtor and form within 30 days from-CoC decides to liquidate unless rejected by CoC. Liquidation Estate and commencement of-NCLT rejects plan Powers of BoD / hold such estate as liquidation-Debtors contravenes Partners fiduciary for theCreditorsplan vest with liquidators. Liquidator to verify such Liquidator to either Secured creditors to Liquidator to verify claims within such time admit or reject claims identify assets offered to claims of secured as may be specified by and them as security against creditors and discharge the Board (IBBI) communicate within 3 the sums owed to them the secured payments days of such admission39 www.sbsandco.com

LiquidationExcess money realized Any short recovery of After paying off secured If all the assets of theby secured creditors secured debts by a creditors, the unsecured corporate debtor arefrom the liquidation of secured creditor to be debts are to be paid off completely liquidated,secured assets to be treated as unsecured in specified order of the liquidator shall applyaccounted and remitted debt and repaid in the priority for dissolution ofto Liquidator. specified order of corporate debtor before priority NCLT NCLT to pass an order Copy of order to be filed DISOLVED dissolving the with RoC within Corporate Debtor from 7 days from the date of the date of such order such order.40 www.sbsandco.com

Resolution Vs LiquidationFactors Resolution LiquidationIntent Revival DissolutionResponsibility Going Concern Not necessaryTime Short (270 days max) Long (Ideally 2 years but can go beyond)Claims No adjudication To be adjudicatedDistribution of Assets That’s not the objective That’s the objectiveHair cut Voluntary acceptance No choice41 www.sbsandco.com

Resolution Vs LiquidationFactors Resolution LiquidationFee Negotiated Fixed by Regulations, if not fixed by CoCInitiation Can be initiated by FC, OC or CD Cannot be initiated except voluntaryMoratorium Mandatorily applicable liquidation Limited ApplicabilityAction under SARFAESI Stayed Creditor can opt to stay out of liquidationInterim Resolution Interim Resolution Professional isProfessional appointed for 30 days No interim liquidator42 www.sbsandco.com

Resolution Vs LiquidationFactors Resolution LiquidationCommittee of Creditors CoC oversees resolution process. RP Tribunal oversees the liquidation process. acts in accordance with directions of Creditors advice not binding on liquidator CoC Inviting Plan/Bids RP invites resolution applicants for Liquidator invites bids for properties Appeal submitting resolution plan Fast Track Appeal against approval of For filing appeal against liquidation order,43 www.sbsandco.com resolution plan lies on specific there is no such restriction grounds No fast track liquidation Fast track resolution is possible

Liquidation Estate -Section 36 Inclusions -Section 36(3) Exclusions -Section 36(4)  Any assets over which the corporate debtor has ownership  Assets in the possession of corporate debtor but owned rights by third parties  Assets that may/ may not be in possession of the  Assets in security collateral held by financial service  corporate debtor, including encumbered assets Tangible providers assets (movable/ immovable)  Personal assets of shareholder or partner of  Intangible assets (such as IPs), securities, financial corporate debtor instruments, insurance policies, contractual rights  Assets of subsidiaries (Indian/ foreign) of the  Assets subject to determination of ownership by Courts corporate debtor  Assets recovered through proceedings for avoidance  Any other assets as may be specified by the IBBI of transactions  Asset in respect of which secured creditor has relinquished security interest  Any other property vested in the corporate debtor on the insolvency commencement date  All realization proceeds of liquidation44 www.sbsandco.com

Distribution of liquidation Asset Insolvency and resolution cost Secured Creditors Workmen dues Wages and unpaid dues to employees Unsecured creditors State and Central govt Preference share holder Equity SH45 www.sbsandco.com

SBS And Company LLP Thanks for your patient hearing!!!Chartered Accountants CA Rajesh D6-3-900/6-9, Flat No. 103 & 104, Veeru Castle FCA, B.ComDurga Nagar Colony,Panjagutta, Hyderabad - 500 082 PH: +91 9849304255Telangana, India. [email protected] Presence inTelangana: Hyderabad (HO)Andhra Pradesh: Nellore, Kurnool, TADA (near SriCity), VizagKarnataka: Bangalore+91-40-40183366 / +91-40-64584494 / +91-9246883366Read our monthly e-Journal www.sbsandco.com/wiki