Tribunal Admits Insolvency Resolution Process, Appoints Resolution Professional

The Tribunal admitted the application to initiate the Insolvency Resolution Process against the Personal Guarantor, declaring a moratorium and appointing a Resolution Professional. The Resolution Professional was instructed to invite creditor claims, prepare a repayment plan with the guarantor, and submit it to the Adjudicating Authority. The judgment outlined the process for creditor meetings and stressed compliance with the IBC, 2016. Periodical reports were scheduled, and the Registry was directed to distribute the order promptly to all parties and their legal representatives, with a Certified Copy available upon formalities' completion.

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Issues:
Initiation of Insolvency Resolution Process against a Personal Guarantor under the Insolvency and Bankruptcy Code, 2016.

Analysis:
The Tribunal, in this judgment, considered an application filed under section 95(1) read with sections 96, 97, 99, and 100 of the Insolvency and Bankruptcy Code, 2016, along with rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The application sought to initiate the Insolvency Resolution Process against a Director who was a Personal Guarantor of a Corporate Debtor in relation to credit facilities extended by a Bank. The Adjudicating Authority appointed a Resolution Professional who recommended the admission of the application based on the default by the debtor and non-payment of the claim amount by the personal guarantor. The Tribunal admitted the application under section 100 of the IBC, 2016, initiating the Insolvency Resolution Process against the respondent and declaring a moratorium.

Subsequently, the Resolution Professional was directed to publish a public notice inviting claims from all creditors within a specified period. The Resolution Professional was tasked with preparing a list of creditors and collaborating with the personal guarantor to formulate a repayment plan, including payment of fees. The repayment plan had to be submitted to the Adjudicating Authority within a stipulated timeframe. The judgment outlined the procedure for summoning a meeting of creditors if deemed necessary by the Resolution Professional, emphasizing compliance with the Code of Conduct provided under the IBC, 2016.

In conclusion, the Tribunal admitted the application, initiating the Insolvency Resolution Process against the debtor/Personal Guarantor, and scheduled the filing of periodical reports. The Registry was directed to disseminate copies of the order to all relevant parties and their legal counsel promptly. The judgment also allowed for the issuance of a Certified Copy upon completion of formalities.

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