Insolvency & BankruptcyUnderstanding Form G in IBC

Introduction

The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) has reshaped India’s approach to insolvency by establishing a clear, time-bound, and transparent mechanism aimed at protecting stakeholder interests, ensuring fair outcomes, and supporting economic stability.

Within this framework, Form G occupies a pivotal position in the Corporate Insolvency Resolution Process (CIRP), acting as the formal gateway through which potential investors are invited to participate in the revival of financially stressed companies.

Issued by the Resolution Professional (RP) in accordance with Regulation 36A(1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, Form G serves as the official “Invitation for Expression of Interest”. It signifies the start of the process to attract eligible parties, known as resolution applicants, who wish to submit resolution plans for a corporate debtor undergoing insolvency.

The primary purpose of Form G is to facilitate informed decision-making by providing prospective resolution applicants with essential details about the corporate debtor, including its financial position, operational status, and the resolution process timeline.

Legal Framework and Purpose

Regulatory Foundation

Form G operates under the regulatory framework established by the Insolvency and Bankruptcy Board of India (IBBI) and serves multiple critical functions:

• Transparency: Provides comprehensive information about the corporate debtor.
• Standardization: Ensures uniform disclosure across all CIRP cases.
• Accessibility: Makes essential information readily available to potential investors.
• Compliance: Meets regulatory requirements for inviting resolution applicants.

Structure and Key Components 

Form G contains detailed information organized into specific sections that resolution applicants must carefully review:

• Corporate Debtor Information:
  • Name and identification details, including PAN, CIN, or LLPIN.
  • Date of incorporation and regulatory authority details.
  • Registered office and principal office addresses.
  • Insolvency commencement date.

• Operational Details:
  • Industry type and location of operations.
  • Installed capacity of main products or services.
  • Data on production and sales for the last two financial years.
  • Employee strength, including details of workmen.

• Process Timeline:
  • Last date for receipt of Expression of Interest (EoI).
  • Date for the publication of the provisional list of prospective resolution applicants.
  • Objection period for the provisional list.
  • Date for the publication of the final list of prospective resolution applicants.
  • Date of issuance of the Information Memorandum.
  • Deadline for submission of resolution plans.

• Professional Details:
  • Resolution Professional’s name and registration number.
  • Contact information for correspondence.
  • Email address for submitting Expressions of Interest.

Eligibility and Compliance Requirements

Section 25(2)(h) Eligibility Criteria

Section 25(2)(h) of the IBC outlines the RP’s duty to invite prospective resolution applicants who meet the criteria specified by the RP, with the approval of the Committee of Creditors (CoC). This ensures that the eligibility criteria are transparent, fair, and aligned with the interests of the creditors.

Section 29A Disqualifications 

Form G highlights the ineligibility norms under Section 29A of the IBC, which are designed to ensure only credible applicants participate. This section bars certain categories of persons from submitting resolution plans, including:

• Undischarged insolvents.
• Wilful defaulters.
• Persons convicted of specified offenses.
• Disqualified directors.
• Connected persons of the corporate debtor (with certain exceptions).

Process Flow and Timeline

Expression of Interest (EoI) Stage 

Once Form G is published, interested parties must submit their EoI by the specified deadline. The RP evaluates these submissions to determine if the applicants meet the eligibility criteria.

Provisional and Final Lists

The RP prepares a provisional list of prospective resolution applicants and invites objections before publishing the final list. This process ensures transparency and allows stakeholders to raise concerns.

Information Sharing

Qualified applicants on the final list receive detailed documentation, including:

• Information Memorandum: Contains comprehensive financial and operational data about the corporate debtor.
• Evaluation Matrix: Outlines the criteria that will be used to assess resolution plans.
• Request for Resolution Plans (RFRP): Provides specific requirements and formats for the plan submission.

Practical Implementations 

Recent cases demonstrate the evolving use of Form G. For instance, multiple Form G publications have been necessary when initial attempts failed to attract viable resolution plans. This flexibility allows the process to adapt to market conditions and stakeholder needs.

Best Practices for Resolution Applicants

Due Diligence Preparation

Before responding to a Form G, potential applicants should:

• Thoroughly assess their eligibility under Section 29A.
• Evaluate their financial capacity to implement a resolution plan.
• Analyze market conditions and industry prospects.
• Review all available information on the corporate debtor’s assets and liabilities.

Strategic Considerations 

Successful resolution applicants typically:

• Demonstrate operational expertise in the relevant industry.
• Present viable financial restructuring proposals.
• Show the capability to manage the corporate debtor post-resolution.
• Align their plan with stakeholder interests, particularly creditors’ recovery expectations.

Documentation Requirements 

Proper documentation is crucial for EoI submissions, including:

• Proof of financial capability and funding arrangements.
• Evidence of technical qualifications and industry experience.
• Compliance certificates regarding Section 29A eligibility.
• Detailed preliminary proposals outlining the intended approach.

Challenges and Considerations

Market Response 

The effectiveness of Form G depends significantly on the market appetite for distressed assets. Economic conditions, industry outlook, and asset quality all influence the response rate.

Timing Pressures 

The CIRP timeline, which is typically 270 days but can be extended to a maximum of 330 days, creates pressure for both RPs and potential applicants. Form G must be issued with sufficient time for meaningful evaluation while respecting statutory deadlines.

Information Quality 

The quality and completeness of the information in Form G and the subsequent Information Memorandum are crucial for attracting high-quality resolution plans. RPs must balance transparency with practicality in information sharing.

AMLEGALS Remarks

Form G represents a critical juncture in the IBC process, serving as the primary mechanism for attracting resolution applicants to distressed companies. For potential investors, understanding Form G’s structure, requirements, and implications is essential for successful participation in India’s insolvency resolution framework.

The evolution of Form G reflects the maturing IBC ecosystem, with continuous improvements based on practical experience and stakeholder feedback. As the Indian insolvency landscape continues to develop, Form G will remain a cornerstone of transparent, efficient, and effective corporate resolution. Success requires careful preparation, thorough due diligence, and strategic thinking. Applicants who approach this process systematically are best positioned for success in India’s dynamic insolvency market.

— Team AMLEGALS

Please reach out to us at rohit.lalwani@amlegals.com in case of any query.