Section 54B of IBC : Section 54B: Duties Of Insolvency Professional Before Initiation Of Pre-Packaged Insolvency Resolution Process

Explanation using Example

Imagine a scenario where ABC Pvt. Ltd. is facing financial difficulties and is considering a pre-packaged insolvency resolution process. The company's creditors have agreed to this approach and have proposed Mr. Sharma, an insolvency professional, to oversee the process.

As per Section 54B of the Insolvency and Bankruptcy Code, 2016, Mr. Sharma's duties would include:

• Preparing a report confirming that ABC Pvt. Ltd. meets the criteria for initiating a pre-packaged insolvency resolution process and that the base resolution plan is in compliance with the necessary requirements.
• Filing this report and any other specified documents with the Insolvency and Bankruptcy Board of India (IBBI).
• Carrying out any other duties that may be specified by the IBBI.

If ABC Pvt. Ltd. does not file the application for the pre-packaged insolvency resolution process within the specified time, or if the application is either admitted or rejected by the National Company Law Tribunal (NCLT), Mr. Sharma's duties as outlined would cease.

Furthermore, the fees for Mr. Sharma's services up until the point of application admission or rejection would be determined as specified and would become part of the costs of the pre-packaged insolvency resolution process.