IBBI Securities & Financial Assets key terms

The time-bound, collective procedure under the Code through which a financial creditor, operational creditor, or the corporate debtor itself seeks resolution of a corporate debtor's insolvency, beginning on the admission date and ordinarily ending within 330 days.

The National Company Law Tribunal, which hears and decides applications to initiate CIRP against companies and limited liability partnerships, approves resolution professionals, and confirms or rejects resolution plans and liquidation orders.

Any person to whom a financial debt is owed, including a person to whom such debt has been legally assigned or transferred. Financial creditors include banks, NBFCs, bondholders, and homebuyers treated as financial creditors under the RERA-related amendment.

A person to whom an operational debt is owed, whether the debt is owed by the corporate debtor directly or assigned to that person. Operational creditors supply goods or services, including employees owed wages and government authorities owed dues.

A debt along with interest that is disbursed against consideration for the time value of money, including money borrowed, bonds, debentures, loans, deferred purchase price, and lease or hire-purchase finance. It excludes operational debts.

A claim in respect of provision of goods or services, including employment, or a debt arising under any law payable to central or state government or a local authority. It does not involve time value of money.

Non-payment of a debt when it becomes due and payable, whether whole or in part. Default is the trigger for initiating CIRP and is judged against the debt's contractual due date, not merely the account's classification by a lender.

A written notice an operational creditor must deliver to a corporate debtor demanding payment of an unpaid operational debt, giving ten days to pay or show an existing dispute, before filing an application under section 9.

A genuine dispute over the existence, amount, or quality of an operational debt that existed before the demand notice or application was received. Its existence allows the Adjudicating Authority to reject an operational creditor's application.

The insolvency professional appointed by the Adjudicating Authority at admission to take control of the corporate debtor's affairs, manage its operations, and constitute the committee of creditors pending confirmation of the resolution professional.

An insolvency professional registered with the IBBI who is appointed to conduct the CIRP, take over management of the corporate debtor, prepare the information memorandum, invite plans, and put them before the committee of creditors for approval.

The decision-making body comprising all financial creditors of the corporate debtor, constituted by the interim resolution professional, which approves resolution plans, decides on continued operations, and may recommend liquidation.

The proportion of a financial creditor's debt to the total financial debt owed by the corporate debtor. Voting share determines a member's weight in committee of creditors decisions and is calculated as per the regulations.

A person connected to the corporate debtor through common ownership, directorship, employment, or family ties as defined in the Companies Act, 2013. Related parties cannot vote in the committee of creditors and are excluded from certain plan protections.

A statutory freeze effective from the CIRP commencement date that bars institution or continuation of suits against the corporate debtor, transfer or disposal of its assets, and enforcement of security interests, while permitting essential supplies.

A notice the interim resolution professional must publish after admission inviting claims from creditors. It states the last date for submitting claims and informs the corporate debtor's creditors of the process.

Amounts submitted by creditors to the resolution professional in response to the public announcement, supported by evidence. The resolution professional verifies and collates claims into the information memorandum and committee records.

A document the resolution professional must prepare containing the corporate debtor's assets, liabilities, financial position, and other relevant information, to be provided to prospective resolution applicants to help them formulate a resolution plan.

A public invitation issued by the resolution professional inviting prospective resolution applicants to submit their interest in submitting a resolution plan. It sets eligibility criteria, timelines, and the manner of submitting plans.

A proposal submitted by a resolution applicant for resolving the corporate debtor's insolvency, specifying how it will pay creditors, continue operations, and manage the business. It must be approved by the committee of creditors and confirmed by the Adjudicating Authority.

A person who submits a resolution plan to the resolution professional for the corporate debtor. The applicant must meet eligibility criteria, including not being an undischarged insolvent or disqualified under section 29A.

Statutory bars preventing certain persons, such as wilful defaulters, undischarged insolvents, persons convicted of specified offences, and those connected to them, from submitting a resolution plan for the corporate debtor.

The process of realising and distributing the corporate debtor's assets to creditors when CIRP fails or the committee of creditors decides to liquidate. It is conducted by a liquidator under the Code and related regulations.

An insolvency professional appointed by the Adjudicating Authority to conduct the liquidation of a corporate debtor, realise its assets, and distribute proceeds to creditors in the order set by section 53.

The statutory order of priority for distributing liquidation proceeds under section 53, beginning with CIRP costs and workmen's dues, then secured creditors, then unsecured creditors, and finally shareholders.

A creditor whose debt is secured by a security interest in the corporate debtor's property. In liquidation, secured creditors may realise their security or surrender it and claim in the waterfall according to their choice.

A transaction such as a preferential transfer, undervalued transaction, extortionate credit transaction, or fraudulent trading that the resolution professional may challenge as harming creditors. Successful challenges restore value to the corporate debtor.

The statutory time window preceding the insolvency commencement date during which transactions are examined for preferential or undervalued transfers. The period varies by transaction type and whether the counterparty is a related party.

A person registered with the Insolvency and Bankruptcy Board of India who is eligible to act as resolution professional, liquidator, or bankruptcy trustee. Registration requires passing the Limited Insolvency Examination and meeting eligibility norms.

The statutory regulator established under the Code that registers insolvency professionals and agencies, oversees insolvency processes, and frames regulations governing resolution, liquidation, and professional conduct.

A body recognised by the IBBI that admits insolvency professionals as members, monitors their conduct, and conducts the Limited Insolvency Examination. Examples include the ICSI Institute of Insolvency Professionals.

The qualifying examination conducted by insolvency professional agencies under IBBI norms that a candidate must pass to be registered as an insolvency professional and to act as resolution professional or liquidator.

A debtor-in-possession resolution route for micro, small, and medium enterprises under Chapter III-A of the Code, where the corporate debtor proposes a base resolution plan to creditors before formal admission, subject to statutory thresholds.

An individual who has guaranteed repayment of a corporate debtor's debt. Under the Code, a financial creditor may initiate insolvency resolution against such a guarantor under Part III, even while CIRP against the corporate debtor is pending.

The Part III process under the Code for resolving the insolvency of individuals and personal guarantors to corporate debtors, initiated before the Adjudicating Authority and conducted by a resolution professional subject to repayment plan approval.

A proposal prepared in an individual insolvency resolution process setting out how the debtor will repay creditors from future income or assets. It requires approval by the Adjudicating Authority after creditor consideration.

A debt-relief route under Part III of the Code for individuals with low income and minimal assets, allowing discharge from qualifying debts after a moratorium period, subject to eligibility thresholds and approval by the Adjudicating Authority.

The framework under Part V of the Code, based on the UNCITRAL Model Law, enabling cooperation between Indian and foreign courts and resolution professionals in insolvency proceedings with a foreign element, through recognition of foreign proceedings.

The date on which CIRP is admitted by the Adjudicating Authority. It triggers the moratorium, starts the statutory timeline for completing the process, and fixes the look-back period for avoidance transactions.

Goods and services the resolution professional considers necessary to keep the corporate debtor's operations running during CIRP. Suppliers cannot withhold such supplies solely because pre-CIRP dues remain unpaid, subject to regulation.