Kapeesh Law Chambers

Introduction The Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) of India is a critical framework designed to resolve corporate insolvency issues in an efficient and time-bound manner. One of the key aspects of the CIRP is the distribution of recoverable assets and proceeds, particularly the priorities between financial creditors and operational creditors. This article aims to explore these priorities and how they influence the outcomes for each type of creditor during insolvency proceedings.    1. Classification of Creditors: Financial vs. Operational   Under the IBC, creditors are broadly classified into two categories:   - Financial Creditors: These include lenders and institutions that provide financial loans or credit to the corporate debtor. Banks, financial institutions, and bondholders are common examples of financial creditors. Their claims are typically based on debt instruments or loan agreements that are finan...

 Introduction   The implementation of the Insolvency and Bankruptcy Code (IBC) in 2016 revolutionized how corporate insolvency and bankruptcy issues are managed in India. At the heart of the Corporate Insolvency Resolution Process (CIRP) under this framework is the Insolvency Professional (IP). These professionals are key to ensuring that the CIRP is conducted efficiently, lawfully, and with a focus on resolution over liquidation.     Appointment and Responsibilities of Insolvency Professionals   Insolvency professionals are designated as Interim Resolution Professionals (IRP) or Resolution Professionals (RP) according to Sections 16 and 22 of the IBC. Once a corporate debtor is admitted into insolvency under Sections 7, 9, or 10, the appointment of the IRP takes place. As per Section 17, the IRP assumes control over the corporate debtor’s management, including its assets and business activities.   Following the formation of the Committee of...