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Corporate Law Firms in Mumbai - Khaitan Legal Associates

Khaitan Legal Associates are acknowledged for their proficiency in comprehending clients' articulated and unspoken intentions, setting them apart as leaders among law firms in Mumbai.

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Corporate Law Firms in Mumbai - Khaitan Legal Associates

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  1. InsolvencyResolutionof PersonalGuarantor KeyFeatures

  2. Whocanfileand where Applicationfortheinsolvencyresolutionofapersonal guarantorcanbefiledby(i)theguarantor,eitherpersonally or through a Resolution Professional (“RP”), in Form A; or (ii) byacreditorofsuchapersonalguarantor,eitherpersonally or through a RP in Form C. The Adjudicating Authority for insolvencyofapersonalguarantoristheDebtRecovery Tribunal(“DRT”). However,iftheCIRPofaCDisalreadypendingwiththe NationalCompanyLawTribunal(“NCLT”),thenthe insolvencypetitionforthepersonalguarantoroughttobe filedbeforethesameNCLT.Ifthepetitionofinsolvency resolution of the personal guarantor predates the CIRP of theCD,thensuchanapplicationwillbetransferredtothe NCLT.

  3. DemandNotice Creditortosendademandnoticetothepersonal guarantor in Form B, demanding payment in 14 daysofserviceofnotice.

  4. Withdrawalof Application TheDRTmaypermitwithdrawalofthe applicationeither(i)beforeitsadmission,ona request made by the applicant or (ii) after its admission,ontherequestmadebytheapplicant, if90%ofthecreditorsagreetosuchwithdrawal.

  5. Interim Moratorium Uponfilingoftheapplication,amoratorium commencesi.e.,duringsuchtimeanyactionor proceeding pending in respect of the debt is stayedandnoproceedingscanbeinitiatedbya creditor against the personal guarantor, for any debt.Interimmoratoriumceasesuponadmission /rejectionoftheapplication.

  6. Admissionor Rejection The appointed RP reviews the application and sends his comments to DRT within 10 days of his appointment recommending rejection or admission oftheapplication.BasedontheRP’sreport,DRTcan either admit or reject the application within 14 days of the RP’s report. If the application is admitted, the DRT can instruct negotiation between the guarantor andthecreditorforarrivingattherepaymentplan.If the application is rejected due to the RP’s recommendationorthattheapplicationistodefraud the creditors, DRT would record that the creditor is entitledtofileforabankruptcyoftheguarantor.

  7. Moratorium Oncetheapplicationisadmitted,amoratoriumis applicable for 180 days. During this period, all pending legal proceedings for any debt of the personal guarantor are stayed, creditors cannot initiate legal proceedings for any debt and the guarantorcannottransfer,alienate,encumberor dispose of any of the assets or his legal right or beneficialinterest.

  8. Repayment The guarantor along with the RP will prepare a repayment plan with a proposal for restructuring of debts.Theproposalshouldcontainajustificationand reason why creditors would agree to the proposed plan and also provide for payment of fee to the RP. While Insolvency Rules require the RP to submit the plan and his report within 21 days from the last submitted claim, the Insolvency Regulations require this to be done before completion of 120 days from theresolutionprocesscommencementdate.

  9. ForMoreInformationVisit www.khaitanlegal.com

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