Corporate Restructuring & Insolvency: Reinventing Business in Times of Disruption

In a world where digital disruption, shifting regulations, and economic volatility shape corporate lifecycles, I’ve witnessed businesses navigate crossroads that demand more than just bold leadership—they demand legal precision. For many companies I’ve advised, the path to revival and growth lies in corporate restructuring and insolvency resolution, which have evolved from last resorts into strategic imperatives.

Through my practice, I’ve learned to see these processes not merely as legal exercises, but as opportunities to reinvent business strategy, protect stakeholder value, and unlock sustainable growth.

Understanding the Landscape: From Restructuring to Insolvency

Corporate restructuring involves realigning operations, ownership, or capital structures to improve efficiency, mitigate risk, or capitalize on market changes. In my experience, it may be voluntary—motivated by new opportunities—or involuntary, triggered by creditor demands or regulatory orders.

The key types of restructuring I regularly handle include:

Mergers & Amalgamations: Combining entities to enhance market presence and create synergies that individual companies couldn’t achieve alone.

Demerger or Spin-off: Creating separate entities for sharper business focus and enhanced shareholder value—a strategy I’ve seen unlock tremendous potential.

Debt Restructuring: Reworking debt terms to ease financial pressure and provide breathing room for sustainable turnaround.

Equity Restructuring: Issuing new shares or executing buybacks to stabilize ownership and signal market confidence.

Operational Restructuring: Optimizing processes and workforce efficiency to build leaner, more resilient organizations.

When financial distress deepens beyond conventional solutions, the insolvency and bankruptcy frameworks under the Insolvency and Bankruptcy Code (IBC), 2016 come into play. Unlike the punitive models of the past that I studied in law school, the IBC focuses on resolution over retribution, emphasizing structured revival wherever possible—a paradigm shift I’ve embraced in my practice.

The Legal Framework: Foundations of Restructuring

India’s restructuring and insolvency framework is anchored by several critical statutes that I navigate daily:

Companies Act, 2013 (Sections 230–240): Governing compromises, arrangements, and amalgamations with comprehensive procedural requirements.

Insolvency and Bankruptcy Code, 2016: The game-changing legislation driving debt restructuring and liquidation processes.

SEBI Regulations: Guiding listed companies through the complexities of mergers, acquisitions, and buybacks.

Income Tax Act, 1961: Ensuring tax compliance while optimizing restructuring outcomes—an area where strategic planning can save millions.

Competition Act, 2002: Preventing anti-competitive outcomes that could derail otherwise sound business combinations.

Disputes and approvals typically proceed before forums I regularly appear in:

• National Company Law Tribunal (NCLT)
• National Company Law Appellate Tribunal (NCLAT)
• High Courts and the Supreme Court of India in select cases

Navigating the Insolvency Pathway: A Practitioner’s View

When a corporate debtor defaults beyond the ₹1 crore threshold, financial or operational creditors may file for resolution under Sections 7 or 9 of the IBC. I’ve guided numerous clients through this process, and upon admission, several critical steps unfold:

A moratorium under Section 14 halts litigation and asset transfers, providing essential breathing space for resolution efforts.

An Interim Resolution Professional (IRP), registered with the Insolvency and Bankruptcy Board of India (IBBI), takes management control of the debtor—a transition I help companies navigate smoothly.

The Committee of Creditors (CoC), formed by the IRP, weighs and votes on resolution plans. I’ve represented both creditors and debtors in these critical deliberations.

Plans approved by at least 66% of the CoC proceed to the NCLT for sanction—a threshold that requires careful stakeholder management and persuasive advocacy.

If no plan is approved within the statutory 330-day period, the company moves into liquidation—a process requiring asset valuation, claim verification, and orderly distribution under judicial supervision. While liquidation isn’t the preferred outcome, I ensure it proceeds with maximum value preservation for creditors.

Challenges & Evolving Jurisprudence

While the IBC has fundamentally reshaped India’s credit culture—something I’ve witnessed firsthand—several challenges persist that I help clients navigate:

Cross-border insolvency: The lack of formal adoption of the UNCITRAL Model Law complicates multi-jurisdictional cases. I’ve had to develop creative solutions for clients with international operations.

Group insolvency: The Code treats each entity separately, complicating conglomerate-level resolution. This fragmented approach often requires coordinated strategy across multiple proceedings.

Pre-packaged insolvencies for MSMEs: While intended to fast-track resolution, practical uptake remains slow. I’m working to make this mechanism more accessible to smaller businesses.

Homebuyers as creditors: While empowering for consumers, this has triggered complex litigation that I’ve litigated extensively.

Landmark judgments such as Swiss Ribbons v. Union of India (2019), Essar Steel (2019), and Jaypee Infratech continue to refine the application of the Code. I closely study these precedents, as they balance commercial wisdom with stakeholder rights—principles I apply in every case.

Key Considerations in Modern Restructuring

Through years of practice, I’ve identified critical considerations that determine restructuring success:

Due Diligence: Identifying hidden liabilities and compliance gaps before they become deal-breakers—something I insist on in every engagement.

Tax Optimization: Leveraging provisions like Section 47 (capital gains exemption) and Section 72A (carry-forward of losses) to maximize post-restructuring value.

Valuation: Ensuring fairness through SEBI-registered merchant bankers and independent experts whose work can withstand judicial scrutiny.

Stakeholder Consent: Securing buy-in from lenders, creditors, and shareholders through transparent communication and fair treatment.

Regulatory Approvals: Navigating SEBI, RBI, IRDAI, and CCI clearances as needed—each with its own procedural nuances.

The digital era also demands my attention to emerging concerns:

• IP transfers and licensing arrangements
• Data privacy compliance under the DPDP Act, 2023
• FEMA regulations in cross-border mergers and restructurings

My Approach: From Strategy to Courtroom

Through my work, I’ve developed an approach that blends legal expertise with commercial strategy to guide clients through complex corporate transformations.

For white-collar crime and corporate investigations, I provide:

• Strategic advice to boards and management during crisis situations
• Comprehensive risk assessments and internal investigations
• Robust defence strategies in enforcement proceedings
• Representation before courts, regulatory agencies, and investigative bodies

Under India’s Insolvency & Bankruptcy Code, I advise:

• Companies, creditors, and insolvency professionals during Corporate Insolvency Resolution Process (CIRP)
• On corporate insolvency and liquidation proceedings with a focus on value preservation
• Debt restructuring and turnaround strategies that balance creditor interests with business viability
• Due diligence for distressed M&A opportunities
• Out-of-court settlements and guarantee enforcement mechanisms

By representing clients in NCLT and NCLAT, negotiating strategically with the Committee of Creditors, and designing compliant resolution plans, I help turn distress into opportunity. Every insolvency isn’t an ending—it can be a new beginning.

Looking Ahead: Trends Redefining the Landscape

Several emerging trends are reshaping how I approach corporate restructuring and insolvency:

ESG compliance is driving sustainable restructuring strategies. Investors and creditors increasingly demand environmental and social responsibility even in distressed situations.

Digital transformation, including AI and blockchain, is influencing operational restructuring. I’m helping clients leverage technology to build more efficient post-restructuring operations.

Strategic alliances across industries are building resilience. I’m facilitating partnerships that would have been unthinkable a decade ago.

Increased global investor participation in distressed assets is creating new opportunities and complexities in cross-border restructuring.

I integrate these trends into tailored legal strategies for my clients, ensuring they remain competitive, compliant, and resilient in an evolving business landscape.

Final Reflections: Restructuring as Strategy, Not Survival

Corporate restructuring and insolvency in India have evolved beyond reactive measures—they are now proactive tools to protect value and shape growth. This transformation represents one of the most significant shifts I’ve witnessed in commercial law.

In my practice, I see each mandate not as paperwork, but as an opportunity to write the next chapter of a company’s story—combining courtroom advocacy with boardroom strategy to deliver outcomes that preserve value and create possibilities.

Whether you’re facing financial distress, contemplating strategic restructuring, or navigating complex corporate investigations, I’m committed to providing guidance that’s both legally sound and commercially pragmatic.

Let’s Build Your Next Chapter Together

Need advice on restructuring, insolvency, or complex corporate investigations?

Connect with me directly at officeofdukeandbaron@gmail.com or visit dukeandbaron.com.

– Advocate Siddharth Nair
Duke & Baron