One of the fundamental features of the Insolvency and Bankruptcy Code, 2016 (Code) is to resolve disputes in a timely manner – a window of 180 days extendable to 90 days — given to the Insolvency Professional to help revive the company. Otherwise, it triggers mandatory liquidation due to non-approval of the resolution plan. Though there is an established process of liquidation devised by the Code, it is seen that the Insolvency Professionals appointed as liquidators do face practical hurdles while undergoing the process of liquidation.

Following are some possible hurdles and the underlined solutions.

1. Submission of claims by the Creditors of the Corporate Debtor (CD)

2. Protection of the assets of the company during liquidation

3. Retention of erstwhile employees of the CD

4. Distribution of funds / assets by the liquidator is also called as a challenge for Liquidator considering the demands of Creditors.

5. Liquidator is required to open a separate bank account as required by Reg. 41 of the Liquidation Regulations with addition of the words “in liquidation”.

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