IBBI Limited Insolvency key terms

The time-bound procedure under the Code through which a financial creditor, operational creditor, or the corporate debtor itself seeks resolution of a corporate debtor's insolvency, ending in an approved resolution plan or liquidation.

A person to whom a financial debt is owed, including a debt disbursed against the consideration of time value of money, such as a loan, bond, or lease classified as finance lease.

A person to whom an operational debt is owed, such as a supplier of goods or services, a lessor of immovable property, or an employee claiming unpaid dues from the corporate debtor.

A debt along with interest disbursed against the consideration for the time value of money, covering borrowings, bonds, debentures, and amounts raised under any transaction having the commercial effect of borrowing.

A claim in respect of provision of goods or services, including employment, or a debt arising under any law payable to the Central or State Government or a local authority.

Non-payment of a debt in whole or in part when due and payable, or failure to pay interest or any other amount that has become due and payable, triggering eligibility to initiate CIRP.

The date on which an application for initiation of CIRP is admitted by the Adjudicating Authority; the moratorium and other protections take effect from this date.

The National Company Law Tribunal for corporate persons, and the Debt Recovery Tribunal for individuals and partnership firms, empowered to admit applications and approve or reject resolution plans.

An insolvency professional appointed to manage the corporate debtor's affairs during CIRP, take control of its assets, and conduct the resolution process under the Code and regulations.

An insolvency professional appointed by the Adjudicating Authority at admission to manage the corporate debtor until the first Committee of Creditors meeting, when the committee may replace or confirm them.

The decision-making body comprising financial creditors of the corporate debtor, which approves resolution plans, appoints the resolution professional, and directs major decisions during CIRP.

The proportion of the financial debt owed by the corporate debtor to a financial creditor, used to compute that creditor's voting percentage in decisions of the Committee of Creditors.

A protective period from the insolvency commencement date during which suits, recovery actions, asset transfers, and enforcement of security interests against the corporate debtor are prohibited, with limited exceptions.

A notice published by the interim resolution professional inviting claims from creditors, specifying the last date for submission and the manner in which claims must be filed.

A registered entity that stores financial information and provides authenticated records of debt, which can serve as evidence of default in an insolvency application.

A proposal submitted by a resolution applicant for resolving the corporate debtor's insolvency, requiring approval by at least sixty-six percent of the Committee of Creditors and confirmation by the Adjudicating Authority.

A person who submits a resolution plan for the corporate debtor, subject to eligibility restrictions such as disqualification of wilful defaulters and persons convicted of specified offences.

Statutory bars preventing certain persons, including wilful defaulters, undischarged insolvents, and those convicted of serious offences, from submitting a resolution plan for the corporate debtor.

The process of realising and distributing the corporate debtor's assets to creditors in the statutory order of priority, initiated when CIRP fails or the committee decides to liquidate.

An insolvency professional appointed to take control of the corporate debtor's assets, realise them, and distribute proceeds to stakeholders in accordance with the liquidation waterfall.

The statutory order of priority for distributing liquidation proceeds, beginning with insolvency resolution costs and workmen dues, then secured creditors, and finally other stakeholders.

A creditor whose debt is secured by a security interest in the corporate debtor's assets, entitled to enforce the security or relinquish it and claim in the liquidation waterfall.

A right, title, or interest created in property in favour of a creditor to secure repayment of a debt, including mortgages, charges, pledges, and hypothecations.

A debtor-in-possession resolution route for micro, small, and medium enterprises under which a base resolution plan is negotiated with creditors before the process is formally initiated.

A transfer of property or interest made to a creditor or other person within the specified look-back period that gives that person an unfair advantage over other creditors.

A transaction in which the corporate debtor transfers assets for consideration significantly lower than market value, made within the look-back period and liable to be avoided.

Actions brought by the resolution professional or liquidator to recover assets transferred through preferential, undervalued, extortionate, or fraudulent transactions and restore them to the corporate debtor's estate.

The statutory retrospective window, measured backwards from the insolvency commencement date or liquidation commencement date, within which certain transactions can be challenged as avoidable.

A person registered with the Insolvency and Bankruptcy Board of India who is qualified to act as resolution professional, liquidator, or in other roles under the Code.

The Insolvency and Bankruptcy Board of India, the statutory regulator that registers insolvency professionals and agencies, frames regulations, and oversees the conduct of insolvency proceedings.

A body recognised and registered by the Board to enrol insolvency professionals, maintain standards of professional conduct, and administer examinations and disciplinary oversight.

An entity recognised by the Board that is eligible to act as a resolution professional or liquidator, provided the individual representing it holds a valid authorisation.

A formal notice served by an operational creditor on a corporate debtor demanding payment of an unpaid operational debt before filing an application to initiate CIRP.

A document submitted by a creditor to the resolution professional or liquidator, establishing the amount and nature of the debt owed by the corporate debtor.

A shortened resolution route for certain categories of corporate debtors, such as small companies, with reduced timelines and a simplified procedure prescribed by the Code.

A person connected to the corporate debtor through specified relationships such as directors, promoters, or holding companies, whose interests are restricted in voting and resolution plan eligibility.

A borrower classified by a lender as having defaulted intentionally despite capacity to pay, or having diverted or siphoned funds, which disqualifies the person from submitting a resolution plan.

The National Company Law Appellate Tribunal, which hears appeals against orders of the National Company Law Tribunal in corporate insolvency matters and against certain Board decisions.

The National Company Law Tribunal, the Adjudicating Authority for corporate insolvency proceedings, empowered to admit applications, approve resolution plans, and order liquidation.