10 points to be noted from the IBC ordinance:
1. To stay in the game a promoter must pay the overdue amount before submitting a resolution plan
2. Undischarged insolvents, wilful defaulters, those convicted of a crime – are ineligible to submit a resolution plan.
3. Those disqualified to be a director, those prohibited by SEBI from accessing securities market – are ineligible to submit resolution plan
4. Those who have indulged in preferential/undervalued/fraudulent transactions are ineligible as well.
5. Those who have enforced a guarantee in respect of a corporate debtor are also ineligible
6. “Connected persons” are also ineligible.
7. Feasibility and viability are key to approval of resolution plan.
8. Any resolution plan submitted before the ordinance by an applicant now ineligible cannot be approved. Fresh bids to be invited.
9. Ordinance makes strong effort to ensure promoters of insolvent companies cannot game the system. Only if they pay up can they participate
10 and last. Promoters may challenge this change in law. But lawyers tell me they may not find a sympathetic ear in court.