Introduction to Prospect Legal

Prospect Legal is a trusted law firm with 15+ years of expertise in corporate litigation, insolvency resolution, and debt restructuring under the Insolvency and Bankruptcy Code (IBC), 2016. Our seasoned team of attorneys specializes in guiding businesses through financial distress by filing strategic debt restructuring cases before the National Company Law Tribunal (NCLT). With a proven track record of reviving over 100+ companies, we combine legal acumen with financial pragmatism to protect stakeholder interests and ensure sustainable recovery.

Where You Can Find Remedies?

Debt restructuring cases are adjudicated by the NCLT under Section 230-232 of the Companies Act, 2013 (for schemes of arrangement) and IBC, 2016 (for insolvency resolution). Additional oversight may involve:

• Committee of Creditors (CoC): Approves restructuring plans during Corporate Insolvency Resolution Process (CIRP).
• Reserve Bank of India (RBI): Governs restructuring frameworks for financial institutions.

Struggling with unsustainable debt? Contact Prospect Legal to explore restructuring options and avoid liquidation.

📞 Call us at 7000-12-7225

Understanding the Legal Process

Voluntary Process (Debtor-Initiative):

1. Scheme Proposal: Draft a restructuring plan with revised payment terms, equity swaps, or asset sales.
2. Stakeholder Approval: Secure 75% approval from creditors and shareholders.
3. NCLT Filing: Submit the scheme for tribunal sanction under Section 230.
4. Implementation: Execute the approved plan under NCLT supervision.

Compulsory Process (Creditor-Initiated CIRP):

1. Default Trigger: Creditors file under IBC Section 7/9 for defaults exceeding ₹1 crore.
2. Moratorium: NCLT imposes a stay on debt recovery actions.
3. CoC Formation: Financial creditors evaluate and approve resolution plans within 330 days.
4. Restructuring/Liquidation: Implement the plan or liquidate assets under Section 53.

Legal Protection Under Key Provisions

Section 230 of the Companies Act: Schemes of Arrangement

• When Can a Claim Be Filed?
  • If the company faces financial distress but is not insolvent.
  • When creditors agree to revise payment terms or convert debt to equity.
  • To avoid liquidation while ensuring business continuity.

Section 60 of the IBC: NCLT’s Adjudicatory Powers

• Powers of the Adjudicating Authority (NCLT):
  • Approve or reject restructuring plans based on feasibility and fairness.
  • Extend CIRP timelines under exceptional circumstances.
  • Ensure compliance with the 330-day resolution deadline.

Process of Remedy Through Prospect Legal

Step 1: Initial Consultation & Case Assessment

• Financial Health Check: Analyze debt exposure, cash flow, and asset liquidity.
• Legal Viability: Determine eligibility under IBC or Companies Act frameworks.
• Risk Mitigation: Advise on haircuts, creditor negotiations, or equity dilution.
• Alternate Strategies: Explore pre-pack insolvency or OTS settlements.

Step 2: Legal Documentation & Filing

• Draft Restructuring Plan: Outline terms for creditor repayments, moratoriums, or asset sales.
• Prepare Filings: Compile financial statements, creditor consents, and audit reports.
• NCLT Compliance: File Form NCLT-1 with affidavits and stakeholder approvals.
• Jurisdiction: Submit to the NCLT bench where the corporate debtor is registered.

Step 3: Compliance & Negotiations

• CoC Coordination: Negotiate with creditors for plan approval and voting.
• Regulatory Liaison: Address RBI/FEMA compliance for foreign debt restructuring.
• Tribunal Hearings: Advocate for plan sanction in NCLT proceedings.
• Interim Relief: Secure stays on asset seizures or recovery suits.

Step 4: Resolution & Final Actions

• NCLT Approval: Obtain final sanction for the restructuring scheme.
• Post-Sanction Compliance: Monitor implementation and creditor payouts.
• Appeal Management: Challenge adverse orders in NCLAT under Section 61.
• Post-Restructuring Support: Assist with financial audits and governance reforms.

For expert legal representation, reach out to Prospect Legal now.
📞 Call us at 7000-12-7225