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Introduction

The Insolvency and Bankruptcy Code, 2016 (IBC) has revolutionized the insolvency resolution process in India. IBC is a code that provides a comprehensive framework for insolvency resolution of companies and individuals. One of the key aspects of IBC is the resolution plan. A resolution plan is a plan proposed by an insolvency resolution professional (IRP) to revive the corporate debtor. It is a proposal to resolve the debt of the corporate debtor and ensure that the creditors receive the maximum return from the proceeds of the insolvency resolution process.

What is a Resolution Plan?

A resolution plan is a plan proposed by an IRP to revive the corporate debtor by reorganizing its business, financial structure and operations. The plan includes measures to meet the repayment obligations of the corporate debtor. It also identifies the debtors to whom the repayment will be made. The plan also includes measures to improve the efficiency and profitability of the corporate debtor. It also aims to provide a viable solution to the corporate debtor's financial distress. The resolution plan must be approved by the Committee of Creditors (CoC) before it can be implemented. The CoC is the body constituted by the IRP to represent the creditors of the corporate debtor. The CoC must approve the resolution plan by a majority vote.

Objectives of the Resolution Plan :

The resolution plan must meet the following objectives:

1. Ensure maximum value of assets of the corporate debtor: The plan must ensure that the assets of the corporate debtor are maximally utilized. It should also identify the debtors to whom the repayment will be made.

2. Reorganize and restructure the corporate debtor's business, financial structure and operations: The plan should provide a viable solution to the corporate debtor's financial distress. It should also aim to improve the efficiency and profitability of the corporate debtor.

3. Ensure that the creditors receive the maximum return from the proceeds of the insolvency resolution process: The plan must ensure that the creditors receive the maximum return from the proceeds of the insolvency resolution process.

4. Ensure timely repayment of the corporate debtor's debt: The plan must ensure that the corporate debtor's debt is repaid in a timely manner.

5. Ensure that the corporate debtor is viable in the long run: The plan must ensure that the corporate debtor is viable in the long run.

Elements of the Resolution Plan

The resolution plan must include the following elements:

1. The name and address of the corporate debtor and the name and address of the IRP.

2. A detailed description of the assets and liabilities of the corporate debtor.

3. A plan to reorganize and restructure the corporate debtor's business, financial structure and operations.

4. A plan to maximize the value of the assets of the corporate debtor.

5. A plan to ensure that the creditors receive the maximum return from the proceeds of the insolvency resolution process.

6. A plan to ensure timely repayment of the corporate debtor's debt.

7. A plan to ensure that the corporate debtor is viable in the long run.

Conclusion:

The resolution plan is an important part of the IBC. It is a plan proposed by an IRP to revive the corporate debtor. It outlines measures to maximize the value of the assets of the corporate debtor and ensure that the creditors receive the maximum return from the proceeds of the insolvency resolution process. The resolution plan must include the name and address of the corporate debtor and the name and address of the IRP, a detailed description of the assets and liabilities of the corporate debtor, a plan to reorganize and restructure the corporate debtor's business, financial structure and operations, and a plan to ensure that the corporate debtor is viable in the long run. The resolution plan must be approved by the CoC before it can be implemented.