Strategic Insolvency Advisory • IBBI Regulation 36A(7) & JRA Covenants

Consortium Joint Bidding & JRA Agreement Architecture

Joint bidding allows operating industrials and financial funds to aggregate technical capability and balance sheet net worth. However, under Section 29A, a disqualification of ANY single consortium member taints the entire bid. We structure robust Joint Resolution Applicant (JRA) agreements, SPV waterfalls, and cross-indemnities to maximize scoring and eliminate legal fragility.

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Consortium Structuring Framework

4 Structural Safeguards for Insolvency Consortiums

CoC Matrix Ready

PILLAR 01

Lead Member Demarcation

Clear designation of the Lead Resolution Applicant with minimum 26% equity lock-in and authority to bind the group before the Resolution Professional and NCLT.

PILLAR 02

Section 29A Insulation

Automatic step-in and equity replacement clauses permitting immediate replacement of a co-bidder if regulatory scrutiny or an unexpected NPA issue arises.

PILLAR 03

Capital Contribution Escrow

Legally binding milestones for upfront equity, debt syndication, and Earnest Money Deposit (EMD) guarantees with severe default dilution penalties.

PILLAR 04

Post-Approval Governance

Structuring the reconstituted Corporate Debtor’s Board composition, reserved minority shareholder matters, operational control, and long-term exit rights.

Judicial Guidelines on Bidding Consortiums

Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta (2020) 8 SCC 531

Confirmed that the Committee of Creditors has commercial wisdom to evaluate the financial capability and viability of consortium bidding models, provided statutory Section 30(2) compliance is met.

Regulation 36B(1) CIRP Regulations Guidelines

A consortium cannot alter its composition after submission of the technical resolution plan without express Committee of Creditors approval and fresh Section 29A affidavits from all newly inducted partners.