Strategic Resolution Plan IBC: Paving the Way for Corporate Revival in India

In India’s fast-paced and often unpredictable business environment, companies can encounter serious financial difficulties. The Insolvency and Bankruptcy Code (IBC), 2016, offers a lifeline through a well-crafted Resolution Plan IBC, empowering companies to recover rather than shut down. A strong insolvency resolution plan goes beyond repaying debt — it revives businesses, maximises stakeholder value, and ensures compliance with Indian laws.

At LawCrust Legal Consulting, a subsidiary of LawCrust Global Consulting Ltd., we believe that a robust business recovery plan is key to unlocking corporate value and sustaining growth. Ranked among the top 10 legal consulting firms in India, we specialise in IBC compliance, debt restructuring, and corporate revival strategies designed for Indian businesses.

Understanding the Resolution Plan IBC

A Resolution Plan IBC, as defined under Section 5(26) of the Code, is a strategy proposed by a resolution applicant for the insolvency resolution of a corporate debtor as a going concern. The objective is not just to settle debts, but to help companies bounce back, secure jobs, and continue contributing to the economy.

1. Legal Backbone: Key Sections & Compliance Essentials

• Who Can Submit a Plan? (Section 29A)

This section ensures only credible applicants — not former promoters or defaulters — can submit a resolution plan. It protects the integrity of the process by excluding those who contributed to the company’s distress.

• What Must Be Included in a Resolution Plan? (Section 30(2), Regulation 38)

Every resolution plan must:

1. Pay insolvency resolution process costs on priority.
2. Pay operational creditors no less than they’d receive in liquidation.
3. Provide for dissenting financial creditors as per Section 53 priorities.
4. Detail management and implementation mechanisms.
5. Comply with all applicable laws.
6. Ensure value creation across stakeholders.

• Role of Committee of Creditors (CoC) – Section 30(4)

The CoC, comprising primarily of financial creditors, must approve the plan with at least 66% voting share, considering feasibility and viability.

• NCLT Approval – Section 31

Once the CoC clears the plan, the National Company Law Tribunal (NCLT) checks for compliance and grants final approval. After this, the plan is binding on all stakeholders.

2. Why Indian Companies Need a Strategic Resolution Plan

• Common Triggers of Financial Distress in India:

1. Cash Flow Crises due to delayed receivables or mismanagement.
2. Excessive Debt with high interest burdens.
3. Market Disruptions, such as digital shifts or competition.
4. Governance Failures and poor strategic decision-making.

Without an effective financial restructuring plan, businesses risk losing control and investor confidence.

3. Challenges in the IBC Process: Indian Context

• Delays at NCLT/NCLAT increase the risk of value erosion.
• Imbalanced CoC Decisions sometimes sideline smaller creditors.
• Legal Appeals Post-Approval disrupt investor interest.
• Low Recovery Rates in some sectors signal the need for better turnaround strategies.

Landmark Judgments Shaping Resolution Plan IBC

• Essar Steel (2020) – Supreme Court

1. Validated CoC’s “commercial wisdom”.
2. Emphasized balancing the interests of all creditors.

• Arun Kumar Jagatramka (2021)

1. Reinforced strict disqualification under Section 29A.
2. Maintained credibility in resolution processes.

• AGI Greenpac Ltd. v. CCI (2025)

1. Made CCI approval mandatory before CoC approval.
2. Ensures antitrust compliance early in distressed asset management.

• Ajay Kumar Goenka (2025 SC Ruling)

Clarified that approved resolution plans are final and binding, even for operational creditors who receive zero value.

Actionable Steps: Crafting a Strategic Resolution Plan IBC

1. Detect Early Stress Signals

Watch out for frequent defaults, rising vendor disputes, and cash flow gaps.

2. Conduct a Holistic Business Review

Evaluate operations, finances, legal exposures, and restructuring options.

3. Design a Value-Focused Recovery Strategy

• Cost Optimisation: Shut down non-performing units and cut overheads.
• Debt Settlement Plan: Renegotiate with lenders — tenure extension, interest concessions, or one-time settlements.
• Revenue Revamp: Innovate, diversify, or target new customer segments.
• Operational Improvements: Automate, streamline supply chains, and boost productivity.

4. Build Stakeholder Trust

Include employees, operational creditors, and investors in the turnaround story.

5. Ensure Legal Soundness

Strictly follow IBC mandates, keep disclosures transparent, and file within stipulated timelines.

6. Seek Expert Help

At LawCrust Legal Consulting, we offer comprehensive support — from plan drafting and negotiation to NCLT representation — ensuring your plan aligns with regulatory expectations and commercial goals.

Outlook: The Future of Resolution Plan IBC in India

Key Trends:

• Digital Reforms: IBBI is enabling faster filings and AI-powered case monitoring.
• Pre-Pack Expansion: Initially launched for MSMEs, pre-pack insolvency could extend to mid-sized companies.
• Stronger Regulatory Oversight: SEBI, RBI, and CCI are working in sync with IBBI to ensure smoother distressed asset management.
• More Inclusive Frameworks: Courts and regulators are moving toward stakeholder balance rather than just creditor-centric outcomes.

Conclusion: Partnering for Corporate Revival with LawCrust

In today’s complex business environment, a Resolution Plan IBC is not just a legal requirement — it’s a strategic opportunity to reset, revive, and rebuild. Whether you’re an MSME or a large conglomerate, navigating insolvency successfully can mean the difference between collapse and comeback.

About LawCrust

LawCrust Legal Consulting, a subsidiary of LawCrust Global Consulting Ltd., provides premium Legal services, ranked among the top 10 legal consulting firms in India, and offers business-focused legal solutions that go beyond compliance. As a Top corporate law firm service provider in India, we specialise in contracts, company law, M&A, Fundraising Solutions, Startup Solutions, Insolvency & Bankruptcy, Debt Restructuring, Hybrid Consulting Solutions, IBC matters, data protection, intellectual property (IP), and cross-border structuring for NRIs. Our fixed-cost legal plans and virtual access make legal support simple, strategic, and scalable.

Need reliable legal backing for your business? Partner with LawCrust — where legal meets growth.

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