IBC Resolution Professional Support: The Process, Start to Finish
The mechanics of IBC Resolution Professional Support are what clients ask about once they have decided to proceed. The questions below are the ones raised most often in practice; the full scope of the service is on the IBC Resolution Professional Support page.
What is the Information Memorandum and why is its financial section so important?
The Information Memorandum (IM) is the document the RP prepares under Regulation 36 of the IBBI (CIRP) Regulations, giving prospective resolution applicants a complete picture of the corporate debtor — assets, liabilities, business operations, litigation, and financial history — so they can prepare informed resolution plans. The financial sections are what applicants price their offers against. If the numbers in the IM later prove inaccurate during an applicant's own due diligence, it can derail negotiations, invite renegotiation of an accepted plan, or expose the process to later challenge.
In practice: We draft IM financial sections to withstand the kind of scrutiny a serious resolution applicant's diligence team will apply — including clearly flagging areas where the underlying books are weak, rather than presenting false precision.
How long does a CIRP actually take, and how does that affect the financial advisory timeline?
The Code allows 180 days from the date of NCLT admission for the CIRP to conclude, extendable once by up to 90 days on the CoC's application to the Adjudicating Authority, with an overall outer limit of 330 days (including time excluded for litigation) as clarified by the Supreme Court in the Essar Steel judgment. In practice, many CIRPs run beyond 330 days due to litigation, but the statutory framework treats that as the exception, not the norm. Every financial advisory workstream — claims processing, IM drafting, forensic review, plan evaluation — has to be sequenced to fit inside this compressed and often litigated timeline.
In practice: We plan the financial workstream backward from the CIRP clock, not forward from an ideal audit-style timeline. A forensic review that would normally take four months in a statutory audit context has to be triaged and prioritised to deliver actionable findings within weeks.
What is a preferential transaction under Section 43 and how do you identify one?
A preferential transaction is a transfer of property or an interest by the corporate debtor, for the benefit of a creditor, surety, or guarantor, in respect of an existing financial or operational debt, that puts that creditor in a beneficial position compared to the distribution they would have received under Section 53 in a liquidation — made within the look-back period preceding the insolvency commencement date. The look-back period is one year for transactions with unrelated parties and two years for transactions with related parties, under Section 43(4). Identifying preferential transactions requires reconstructing the corporate debtor's transaction history for that period and testing each significant payment or transfer against this framework.
In practice: The forensic work here is transaction-by-transaction — there is no shortcut. We build a transaction timeline against the look-back window and flag anything that shows an unusual pattern relative to the corporate debtor's normal payment behaviour before recommending it for the RP's formal review.
What is the difference between preferential, undervalued, extortionate, and fraudulent transactions under the Code?
These are four distinct avoidance categories under the Code, each with its own test. Preferential transactions (Section 43) favour one creditor over others in the look-back period. Undervalued transactions (Section 45) involve the corporate debtor transferring an asset for significantly less than its value, without a legitimate business justification. Extortionate credit transactions (Section 50) involve credit terms that are exorbitant relative to the risk, within two years of the insolvency commencement date. Fraudulent or wrongful trading (Section 66) involves business conducted with intent to defraud creditors, or continued trading despite the directors knowing there was no reasonable prospect of avoiding insolvency. Each requires a different forensic and legal test, and the RP's application to the Adjudicating Authority must be framed under the correct section.
In practice: We flag findings to the RP's legal counsel with the specific section we believe applies and the evidentiary basis for that conclusion — the RP's counsel then makes the final call on which application to file. We do not draft the legal application ourselves; that is outside a CA firm's role.
How does the claims verification process actually work, and what documents does a creditor need to submit?
After the public announcement of CIRP commencement, creditors submit claims in the prescribed form — Form B for operational creditors other than workmen and employees, Form C for financial creditors, Form D for workmen and employees, Form E for an authorised representative of workmen and employees, and Form F for other creditors — within the timeline stated in the public announcement (typically 14 days from the appointment of the interim resolution professional); a creditor that misses it may still submit a claim under Regulation 12 up to the issue of the request for resolution plans or 90 days from the insolvency commencement date, whichever is later, with reasons for any delay beyond 90 days. Each claim must be supported by documentary evidence — invoices, loan agreements, statutory dues notices, or employment records as applicable. The RP (or the RP's financial team) then verifies each claim against the corporate debtor's own books and either admits, rejects, or provisionally admits it, with reasons recorded.
In practice: We frequently support the creditor side of this too — a vendor or lender that submits a claim with weak documentary support risks having it rejected or provisionally admitted at a reduced value. Getting the substantiating paperwork right the first time avoids a costly and time-pressured appeal process.
What happens if a creditor disagrees with how the RP has admitted or rejected its claim?
A creditor aggrieved by the RP's decision on its claim can approach the National Company Law Tribunal (Adjudicating Authority) under Section 60(5), which has jurisdiction over such disputes arising during CIRP. This is a legal remedy, and it consumes time within the already compressed CIRP clock — which is precisely why getting the claim right, with full documentary support, at the point of submission matters more than planning to litigate a rejection later.
In practice: We advise creditors to treat the claims submission stage with the same rigour as a debt-recovery filing — reconciled ledgers, signed confirmations, and a clean paper trail — rather than a routine administrative form.
What is the moratorium under Section 14 and how does it affect financial reporting during CIRP?
On admission of the CIRP application, the Adjudicating Authority declares a moratorium under Section 14, which prohibits the institution or continuation of suits against the corporate debtor, prevents transferring, encumbering, or disposing of the corporate debtor's assets, and suspends the enforcement of security interests, among other restrictions, for the CIRP period. From a financial reporting perspective, this means the corporate debtor's financial position is effectively frozen from a legal-enforcement standpoint even as operations may continue as a going concern under the RP's management — the RP's financial reporting has to reflect both the frozen legal status and the operating reality if the business continues to trade.
In practice: We prepare going-concern cash-flow reporting for the RP separately from the pre-CIRP historical financials that go into the Information Memorandum — conflating the two in reporting to the CoC creates confusion about what the numbers actually represent.
What is the Section 53 waterfall and why does it matter even before liquidation is on the table?
Section 53 sets out the statutory order of priority for distributing proceeds in a liquidation: insolvency resolution process costs and liquidation costs first, then secured creditors and workmen's dues for the preceding 24 months (ranking pari passu), then employee dues for the preceding 12 months, then unsecured financial creditors, then government dues and remaining secured creditor claims (where security was relinquished), then any remaining debts, and finally equity/preference shareholders. Even during CIRP, this waterfall is the reference point Section 30(2)(b) uses to test whether operational creditors are being paid at least what they would receive in a hypothetical liquidation — so it shapes resolution plan design long before actual liquidation occurs.
In practice: We model the Section 53 waterfall early in every CIRP engagement — not just when liquidation looks likely — because it is the benchmark every resolution plan has to be tested against for Section 30(2) compliance.
What happens if no resolution plan is approved within the CIRP timeline?
If the CIRP timeline (including any extension) expires without an approved resolution plan, or the CoC votes to liquidate the corporate debtor under Section 33 at any point (by a 66% majority), the Adjudicating Authority passes a liquidation order. Under Section 34(1) the RP acts as the Liquidator by default, subject to giving written consent to the Adjudicating Authority, unless the Adjudicating Authority replaces the RP under Section 34(4), and the process shifts from resolution to asset realisation and distribution under the IBBI (Liquidation Process) Regulations, 2016, targeting completion within approximately one year under Regulation 47A, though this can be extended for recorded reasons.
In practice: We treat the transition to liquidation as a continuation, not a restart — the claims register, forensic findings, and financial records built up during CIRP carry directly into the liquidation estate work, which materially speeds up the Liquidator's early workstreams if the same financial advisory team continues.
Where this sits in the wider engagement
IBC Resolution Professional Support rarely arrives on its own. The statutory basis and the current requirements are set out on the IBC Resolution Professional Support service page, and the related services are grouped under Corporate Finance.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On IBC Resolution Professional Support we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.