Repayment Plan


Tantamount to a Resolution Plan, the Code requires that the Guarantor in consultation with the RP, shall prepare a Repayment Plan ("Plan") which shall inter alia provide for a restructuring mechanism for the debts owed by the Guarantor, justification for preparation of such Plan and reasons on the basis of which the creditors may agree upon the plan. Upon the finalization of the Plan, the RP shall within 21 days of receipt of the last claim of any creditor, submit the Plan to the AA along with a report requesting whether or not a meeting of the creditors is required. In the event that a meeting is required, the meeting of the creditors ("MoC") shall take place within a period of 28 days from the date of the recommendation by the RP.

In terms of Section 106 of the Code, there is significant difference from the CIRP in relation to the involvement of the creditors to be party to or have a say in the formulation of the Plan. Unlike the CIRP, no person other than the guarantor can prepare a Repayment Plan. Further, in terms of this section, the RP may recommend that an MoC is not required to be constituted at all. Unlike the resolution plan for corporate debtors, there is no mandate to require that the Plan be fair, equitable and just, to all the creditors of the Guarantor and if the RP decides that an MoC is not required , the creditors have no say in the repayment of the debts owed to them however in the event any creditor makes a request to constitute a MoC and such creditor has more than 33% of voting share among the other creditors, then in that event the RP has to call for an MoC. The other creditors being creditors having less than 33% of the voting share, are however permitted to object to the Plan which shall be discussed further on.

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