Corporate Insolvency & Rescue

Corporate Insolvency & Rescue

by dpmca
We specialise and work closely with companies and management team under business distress by helping them with advise and support in liquidation or restructuring, assist in accounting and documentation for the same. We also specialise in driving schemes for rehabilitation of sick companies and driving rescue mechanism against lenders.
Restructuring and Revival Support

Commercially viable business enterprise in the form of corporate entity, which is facing temporary financial difficulties, can be revived with a scheme of arrangement between the Company, Shareholders and creditors, if sanctioned by the Court. Non-viable business but with high value of assets can also be restructured to fetch maximum valuation in its disposal or transfer by a scheme of compromise and arrangement. To structure a scheme is vital. To scrutinize the draft of such scheme, keeping the commercials aspects in focus is also vital. To propose ‘the give and take’, which a commercial man of reasonable business acumen would accept without a great hesitation is always better known to Chartered Accountant; however the best part belongs to the businessmen. Therefore, Chartered Accountant has vital role to play in such circumstances.

Liquidation Support

Indian businessman is generally in love with his business. At times, his emotions are driving the urge to hold on even almost dead business. To wind up the non viable or insolvent business enterprise would allow the utilisation of available resources in optimum manner. Liquidation of business entity is the solution for such contingency. Liquidation could be forced or induced.

Defend Liquidation

Forced Liquidation, if the enterprise is viable or capable of survivial, can be defended in the court of law. Financial facts play vital role in such defence. If it can be proved that business is incapable to service its debts, liquidation can be forced. Chartered Accountant can take a lead in establishing the facts either way.

Force Liquidation

Business enterprise which fail to pay the dues of its creditors on long-term basis are deemed to be unfit for survival. Though there are several causes to force the liquidation, major cause is this. Though, this is not a recovery mechanism but a legal threat of such nature may bring the desired result, if there are reasons for the management to survive the threat of termination. Chartered Accountant can assist in initiation, conduct and conclusion of such proceedings with the support of vital financial facts.

Induced Liquidation

When the corporate entity is identified by the management to be nearly insolvent, destitute and not fit for survival, such step could be considered. It could be voluntary viz. member’s or creditor’s winding up or through the proceedings initiated before the Court of law.

Documentation, accounting & legal compliance

Insolvency proceedings require presentation of vital financial facts to the Liquidator in the Statement of Affairs for servicing the dues of secured, unsecured and statutory creditors as well as workers and shareholders (Contributories) of the Company in liquidation. Fair estimate of realizable value of properties and assets and proper quantification of liabilities and obligations payable is necessary. These aspects, if ignored or inappropriately presented, can invite prosecution for the ex directors and key managerial persons of the Company in liquidation. Assistance in preparation of Statement of Affairs, which could be least controversial; be best rendered by Chartered Accountant. Post liquidation, ex directors and key managerial persons can be called upon by the Liquidator to produce facts and figures which are prima facie not known to him in the statement taken on oath, for taking custody of and protection of properties and assets of the Company in liquidation. Preparatory work therefore, if supported by Chartered Accountant, can be of great assistance. Precautions taken during the proceedings of winding up can also be helpful in defending the allegations or charges of fraudulent transfer of assets, void transfer of assets and shares, misfeasance and misappropriation of properties and assets of such company in liquidation.

Rehabilitation of Sick Companies

Forced Liquidation, if the enterprise is viable or capable of survivial, can be defended in the court of law. Financial facts play vital role in such defence. If it can be proved that business is incapable to service its debts, liquidation can be forced. Chartered Accountant can take a lead in establishing the facts either way.

Rescue Mechanism against Lenders
Top