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Liquidation Timeline
What happens if no resolution plan is approved — the liquidation process and the statutory distribution waterfall.
What happens if no resolution plan is approved — the liquidation process and the statutory distribution waterfall.
Click any stage to see the detail. This is the process that follows if no resolution plan is approved during CIRP — see our CIRP Timeline Tool for what happens before this point.
The Adjudicating Authority orders liquidation if no resolution plan is approved within the CIRP period, if the CoC decides to liquidate the corporate debtor, or if an approved resolution plan is later contravened.
The Resolution Professional is often appointed as Liquidator, though the CoC or Adjudicating Authority may appoint a different insolvency professional.
The Liquidator makes a public announcement calling for claims from all stakeholders, including creditors who may not have participated in CIRP.
The Liquidator verifies submitted claims and prepares a list of stakeholders, forming the basis for later distribution.
The Liquidator realises the corporate debtor's assets, generally through the sale mechanisms prescribed under the Liquidation Process Regulations.
Sale proceeds are distributed strictly in the statutory priority order: insolvency resolution and liquidation costs first, then secured creditors and workmen's dues (paripassu), other employees, unsecured financial creditors, government dues, remaining unsecured creditors, and finally shareholders.
Once assets are completely liquidated, the Liquidator applies to the Adjudicating Authority for the corporate debtor's dissolution, bringing the company's legal existence to an end.