Resolution Plans Compliance & Feasibility Audit
Pre-submission legal and financial vetting for Prospective Resolution Applicants (PRAs). Guarantee statutory waterfall compliance, protect against CoC disqualification, and bulletproof your turnaround strategy before the NCLT.
Resolution Plan Statutory Feasibility Matrix
Pre-submission audit to guarantee plan compliance prior to CoC voting and NCLT approval.
1. Section 30(2) Mandatory Legal Waterfall
Unconditional provision for payment of unpaid Insolvency Resolution Process Costs (IRPC) in priority to all other debts within 30 days of NCLT approval.
Payment to operational creditors must equal or exceed liquidation value or Section 53 waterfall entitlement, paid in priority to financial creditors.
Dissenting financial creditors who vote against or abstain must receive cash payout equal to liquidation value in priority to assenting creditors.
Clear delineation of Monitoring Committee, reconstitution of Board of Directors, and supervisory covenants during implementation window.
Comprehensive financial turnaround model, source of funds certification, and timeline for statutory and competition (CCI) clearances.
In Committee of Creditors of Essar Steel v. Satish Kumar Gupta (2020), the Supreme Court ruled that while commercial wisdom of CoC is paramount, the Adjudicating Authority must ensure strict compliance with Section 30(2) payment guarantees.
Essential Legal Pillars of an Approved Resolution Plan
Statutory Protection and Priority Distribution
Payment Waterfall Hierarchy
Strict priority: CIRP Costs paid first in full, followed by Operational Creditors receiving at least liquidation value, and cash payouts to dissenting financial creditors.
Clean Slate Shield (§32A)
Statutory immunity extinguishing all past criminal liability, ED/CBI attachments, and tax claims of the corporate debtor prior to plan approval (*Ghanshyam Mishra* doctrine).
Implementation & Supervision
Appointment of Monitoring Committee comprising RP and CoC representatives to oversee capital infusion, operational revival, and debt satisfaction.
Retain Counsel for Resolution Plan Pre-Audit
Have your draft resolution plan vetted by experienced NCLT turnaround counsel prior to CoC submission.