Section 29 of IBC : Section 29: Preparation Of Information Memorandum

Explanation using Example

Imagine a company, QuickTech Solutions, is undergoing insolvency proceedings. The resolution professional, appointed by the National Company Law Tribunal (NCLT), is responsible for managing the process. As per Section 29 of the Insolvency and Bankruptcy Code, 2016, the resolution professional prepares an information memorandum containing critical details such as QuickTech's financial status, ongoing litigation, assets and liabilities, and other information that a potential resolution applicant would need to formulate a resolution plan.

Next, TechRevive Inc., a company interested in acquiring QuickTech, approaches the resolution professional to participate in the bidding process. Before providing TechRevive Inc. with the information memorandum and other relevant data, the resolution professional requires them to sign a confidentiality agreement. This agreement mandates that TechRevive Inc. will not engage in insider trading, will safeguard any intellectual property of QuickTech they come across, and will not disclose any information to third parties unless they adhere to the confidentiality and intellectual property protection terms.

This ensures that while TechRevive Inc. receives all the necessary information to devise a comprehensive resolution plan for QuickTech, the information is also protected from misuse or unauthorized distribution.