Claim Managment
We provide end-to-end support for filing and managing claims of financial creditors, operational creditors, and homebuyers under the IBC framework during CIRP and liquidation proceedings. Our services include accurate claim preparation, documentation, timely submission, follow-ups with Insolvency Professionals, and assistance in claim verification and dispute resolution. We ensure compliance with legal requirements while protecting your interests and maximizing claim recovery in a smooth and efficient manner.
Filing and Management of Claims in CIRP and Liquidation (IBC, India)
The filing and management of claims by financial creditors, operational creditors, and homebuyers is a key part of the Corporate Insolvency Resolution Process (CIRP) and liquidation under the Insolvency and Bankruptcy Code (IBC), 2016. This process ensures fair treatment of all stakeholders and helps resolve financially distressed companies in a structured way.
Types of Creditors Under IBC
1. Financial Creditors
Financial creditors include banks, NBFCs, and financial institutions that lend money to a company. Their loans are usually secured with assets. Because of their financial exposure, they have higher priority and major decision-making power in the insolvency process.
2. Operational Creditors
Operational creditors are suppliers, vendors, employees, and service providers who provide goods or services to the company. Their claims are generally unsecured but are important for keeping business operations running.
3. Homebuyers
Homebuyers are treated as financial creditors under IBC (after legal amendments). They have the right to file claims and participate in the Committee of Creditors (CoC), especially in real estate insolvency cases.
Filing of Claims in CIRP
1. Public Announcement
Once CIRP starts, the Insolvency Professional (IRP/RP) makes a public announcement inviting claims from all creditors within a fixed time.
2. Submission of Claims
Creditors must submit their claims in prescribed forms along with supporting documents like agreements, invoices, or payment records.
3. Verification of Claims
The Insolvency Professional verifies all claims to check their accuracy and validity. Only verified claims are accepted.
4. Handling Disputes
If there are disputes, the Insolvency Professional may review them or refer matters to the adjudicating authority for resolution.
Management of Claims During CIRP
1. Transparent Communication
Regular updates must be shared with creditors about claim status, CIRP progress, and decisions.
2. Committee of Creditors (CoC)
Financial creditors form the CoC and take key decisions, including approving the resolution plan.
3. Resolution Plan
The resolution plan must consider all verified claims and balance the interests of financial creditors, operational creditors, and homebuyers.
4. Voting on the Plan
The CoC votes on the resolution plan. Approval requires at least 66% voting share.
Claims in Liquidation Process
If no resolution plan is approved, the company goes into liquidation.
1. Asset Sale
The liquidator sells company assets to generate funds.
2. Distribution of Proceeds
Funds are distributed as per the priority (waterfall mechanism) under Section 53 of IBC:
Insolvency costs
Secured creditors and workmen dues
Employees
Unsecured creditors
Government dues
Other stakeholders
3. Final Report
After distribution, the liquidator submits a final report to the authority to close the process.
Conclusion
Proper filing and management of claims is essential in CIRP and liquidation. It ensures fairness, transparency, and maximum recovery for creditors. Understanding this process helps stakeholders protect their rights and make informed decisions under the IBC framework.