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CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency

Three companies of the Sundaram group, each under separate CIRP before the same NCLT bench, share a common management team, a single bank account and common office premises. The resolution professionals ask that the three CIRPs be heard together and run on one timetable, while each company's assets and liabilities remain separate and each gets its own resolution plan. Which concept does this request describe?

This is procedural consolidation. The proceedings are heard together and coordinated for efficiency, but each company keeps its own assets, liabilities, creditors and resolution plan. Substantive consolidation would instead pool the assets and liabilities of the group companies into a single estate.

  1. ASubstantive consolidation
  2. BProcedural consolidationCorrect
  3. CCross-border insolvency
  4. DPre-packaged insolvency resolution

Explanation

Procedural consolidation means coordinating or jointly administering the proceedings of group entities for efficiency, while each entity's estate stays separate. Here the assets, liabilities and plans remain separate, so it is not substantive consolidation, which would merge the estates into one pool.

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