Insolvency Claim Verification
Collection of claims is one of the basic tasks which a resolution professional/liquidator has to perform. The claims form the basis of payouts in resolution plan or distribution in liquidation. The law lays down detailed procedure for each class of stakeholders for submission of proof of claims. The claimants are required to submit their claims in accordance with the CIRP Regulations/Liquidation Regulations along with facts substantiating their claim.
What is an Insolvency claim?
Claim means a right to payment and right to remedy as defined under the code in Section 3(6) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "Code"). Right to payment underlines the claim, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured. Right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured :
Who can submit a claim and to whom?
All creditors' i.e. operational or financial creditors, workmen, employees or any other stakeholder to whom money is owed shall be eligible to file a claim. The claims during the insolvency resolution process shall be made to the resolution professional and, in case of liquidation all claims shall be submitted to the liquidator. The claims must be in the form as prescribed below.
How can a creditor prove his claim?
The creditors shall provide all documents to the resolution professional / liquidator to prove their claims and they are namely:
- records available with the Information Utility
- a contract of supply of goods or service with the corporate debtor
- an invoice demanding payment for the goods and services supplied to the corporate debtor
- a proof of employment such as contract of employment or evidence of notice demanding payment of unpaid dues
- a financial contract supported by financial statements as evidence of the debt
- financial statements showing that the debt has not been paid
- an order of a court or tribunal that has adjudicated upon the non-payment of a debt, if any.
The resolution professional/ liquidator shall have the power to call upon any creditor to furnace additional proof to back their claim.
Who shall verify the claims of the creditors?
In case of Insolvency Resolution Process; it is the duty of the resolution professional to verify all the claims of the creditors within 7 days from the date of last receipt of the claims. Whereas in a liquidation process, the duty to verify all claims of the creditors shall lie with the liquidator. The liquidator shall verify the claims submitted within 30 days from the last date for receipt of claims. Based on the proof of claims submitted to the liquidator/ resolution professional, may either reject or admit the claim. In whole or in part as the case may be.
How S.K. Agrawal & Co. Helps in Claim Verification?
- Assistance in Claim filing with supporting documents.
- Assistance in obtaining Claims or Invoices amounts which are under dispute.
- Advisory over Adjustment of Creditor balance & with Debit balances in Corporate Debtor Books.
- Assistance in filing Claim by a Creditor.
- Assistance in filing such proof before Approval of Resolution Plan.
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