Best Restructuring & Insolvency Lawyers in Bengaluru

About Restructuring & Insolvency Law in Bengaluru, India

Restructuring and insolvency law in Bengaluru, India, covers the legal framework for financially distressed businesses and individuals seeking to manage or resolve their debts. The city, being a major commercial hub, sees a high volume of corporate and individual financial distress cases. The laws provide structured mechanisms for debt resolution, corporate restructuring, bankruptcy, and liquidation. Both creditors and debtors rely on these laws to achieve fair outcomes, whether through voluntary agreements or formal legal proceedings.

Why You May Need a Lawyer

Dealing with financial distress, whether as a business or an individual, can be complex and stressful. You may need a restructuring and insolvency lawyer in Bengaluru if:

• You are unable to repay debts to creditors and are facing legal action.
• Your business is experiencing financial difficulties and requires restructuring to continue operations.
• You are a creditor whose debtor is unable or unwilling to pay what is owed.
• You wish to initiate or defend against insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016.
• You want to explore options such as corporate insolvency resolution, liquidation, or individual bankruptcy.
• You need advice on compliance with statutory requirements related to insolvency procedures.
• You are involved in cross-border insolvency matters as part of Bengaluru’s growing international business community.

A qualified legal professional will guide you through the process, protect your interests, and ensure compliance with applicable laws.

Local Laws Overview

The primary law governing restructuring and insolvency in Bengaluru, like the rest of India, is the Insolvency and Bankruptcy Code (IBC), 2016. The IBC consolidates earlier insolvency laws, providing a unified process for the resolution of insolvency among companies, partnerships, and individuals. Key aspects relevant to Bengaluru include:

• National Company Law Tribunal (NCLT), Bengaluru Bench: This is the adjudicating authority for corporate insolvency and restructuring cases in Bengaluru. It handles matters related to company law, including mergers, winding up, and insolvency resolution.
• Time-bound process: The IBC sets out specific timelines for completing different phases of insolvency and restructuring, generally seeking to resolve cases within 180-270 days.
• Moratorium: Once insolvency proceedings are admitted, a moratorium is imposed, preventing any further legal action or recovery proceedings against the debtor.
• Committee of Creditors (CoC): Creditors are organized into a committee that plays a central role in deciding the future of the debtor company.
• Resolution Professionals: Registered insolvency professionals are appointed to manage the process, oversee the debtor’s assets, and facilitate decision making.
• Liquidation: If a resolution is not possible, the law provides for the orderly liquidation of assets and settlement of debts.

In addition to the IBC, other related laws in Bengaluru include the Companies Act, 2013, and various state government rules for courts and registration.

Frequently Asked Questions

What is the Insolvency and Bankruptcy Code (IBC), 2016?

The IBC is a central law that provides a comprehensive framework for insolvency resolution and liquidation of companies, partnerships, and individuals. It establishes time-bound processes and the role of tribunals and professionals in managing insolvency cases.

Who can initiate insolvency proceedings in Bengaluru?

Both creditors (financial or operational) and debtors themselves can initiate insolvency proceedings under the IBC at the NCLT, Bengaluru Bench for companies or through appropriate authorities for individuals.

What is the role of the National Company Law Tribunal (NCLT) in Bengaluru?

The NCLT, Bengaluru Bench, acts as the adjudicating authority for company-related insolvency and restructuring matters. It admits petitions, oversees the resolution process, and passes orders for liquidation when needed.

How long does a corporate insolvency resolution process usually take?

The IBC mandates that the process should be completed within 180 days, with a possible extension of up to 90 days, bringing the maximum to 270 days in exceptional cases.

What happens to the management of a company once insolvency proceedings are admitted?

Once proceedings are admitted, the management of the company is taken over by an insolvency resolution professional, and the powers of the board of directors are suspended for the duration of the process.

Can individuals file for insolvency in Bengaluru?

Yes, provisions under the IBC and associated regulations allow individuals to file for insolvency. There are separate processes for individuals and partnership firms.

What is a moratorium under IBC?

A moratorium is a legal stay on proceedings against the debtor and their assets. No new or pending lawsuits, foreclosures, or asset recovery actions can continue during the moratorium period.

What is the role of creditors in the insolvency process?

Creditors form the Committee of Creditors (CoC) and make key decisions regarding resolution plans, including the future of the debtor business or settlement of debts.

What is a liquidation process?

If insolvency resolution fails, the debtor’s assets are liquidated (sold off) to pay outstanding debts as per the waterfall mechanism provided under the IBC.

Is it necessary to have a lawyer for insolvency proceedings?

While not mandatory, having a lawyer is highly recommended, given the complexity of insolvency law, court procedures, and the need to protect your interests throughout the process.

Additional Resources

If you are seeking more information or assistance, the following resources are helpful:

• National Company Law Tribunal (NCLT), Bengaluru Bench: Handles corporate insolvency and restructuring cases for the region.
• Insolvency and Bankruptcy Board of India (IBBI): The regulatory body overseeing insolvency professionals and processes across India.
• Karnataka State Legal Services Authority: Provides legal aid and guidance for individuals in need.
• Professional Insolvency Practitioners: Registered professionals who specialize in managing insolvency and restructuring cases.
• Local Bar Associations: Offer directories of experienced insolvency lawyers in Bengaluru.

You can approach these organizations for procedural guidance, informational material, or to find professionals for your case.

Next Steps

If you need legal assistance regarding restructuring or insolvency in Bengaluru, consider the following steps:

• Assess your situation to determine if you are dealing with possible insolvency or just temporary financial distress.
• Collect all financial documents, agreements, and records relevant to your debts and assets.
• Consult with an experienced restructuring and insolvency lawyer in Bengaluru to understand your rights and options.
• Discuss possible solutions with your creditors if you wish to avoid formal insolvency proceedings.
• If formal legal action is required, your lawyer will guide you through filing necessary petitions and representing you at the NCLT or relevant court.
• Stay informed about your case’s progress and comply with all legal requirements as advised by your counsel and the court.

Timely action and professional advice are crucial in restructuring and insolvency matters. Taking early steps can help protect your assets and interests.