Legal remedy against insolvency & bankruptcy suit

If a person sued a company claiming that the company owes his money.what will company do in case of insolvency and bankruptcy

Answers (2)

77 votes

This is a serious matter. If the NCLT admits the petition the management of the company is taken over by the and an Insolvency Professional is appointed. Every comma and full stop matter. Action under IBC code is very strict. You may consult us as we are experts in this field.

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65 votes

It seems you are under wrong conceptions. The information you provided in the question is not sufficient to answer in proper manner. In the given circumstances, let me try to answer you:

Under insolvency, the company can apply to the court to be declared as insolvent, upon considering the case of the company, the court appoints official liquidator. The official liquidator (OL) is supposed to (i) take charge on the assets of the company; (ii) liquidate the assets, means sell of those assets to collect money; (iii) simultaneously publish a notice in the newspaper, to invite claims; (iv) upon receipt of the claim the OL is duty bound to verify the claims; there after settle the claims in the following order:
(a) OL fees and charges; (if money left then)
(b) Salaries to the employees of the company; then
(c) payment to secured creditors; then
(d) payment to unsecured creditors.

In your case you have already filed a case of recovery, your claim shall prevail reason being, as I anticipate from the facts that the company as not initiated insolvency proceedings so far.

You are advised to seek a proper consultation and bring all the documents you have with you. I can also advise what the steps and precautions you must take.

You can also file a case for compulsory winding up of the company in addition to the suit for recovery.

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