There's a moment - quiet but powerful - when a promoter realises they're no longer in control. That moment is called Day 1 of CIRP.
From that day, the company is no longer "yours." The board is suspended, a Resolution Professional (RP) steps in, and the Committee of Creditors (CoC) becomes the most important room in the building.
But here's what no one tells you: CIRP is not just a legal process. It's an emotional one.
What actually happens inside CIRP? It's a 180° shift.
lThe RP becomes the custodian of the company.
l All operational and financial decisions go through them.
l The promoters can no longer run the business like they used to.
l Lenders meet as the CoC, often for the first time as a group.
There's financial stress — but there's also ego stress.
"The law empowers the RP, but the success of CIRP depends on how much information they're given — and how early."
The Promoter Paradox
Here's the irony: the promoter can be the biggest asset — or the biggest hurdle. Some cooperate, guide the RP, and help protect value. Others resist, delay information sharing, or flood the process with litigation.
And when that happens, CIRP loses steam. Value erodes. Buyers get cold feet.
From my own experience, even the most promising resolution plan can fall flat because:
l Inventory data wasn't accurate
l Legal cases weren't disclosed
l Vendor relationships turned hostile
l Or the promoter simply didn't show up for key meetings
The Real Cost of Non-Cooperation
l Increased legal fees for every adjournment
l Repeated IRP/RP reappointments due to disputes
l Less interest from Resolution Applicants
lDelays beyond the 330-day deadline The system is there, but is the mindset? Yes, the IBC framework is robust. But its success relies heavily on intent.
A company can have the best lawyers, advisors, and even an interested buyer -- but if the promoter is stalling or fighting every step, no one wins.
Especially not the business.
So what can be done?
l Supportive yet firm handling by RPs — trust, but verify
l Early education for promoters on the IBC process
l CoC alignment -- focus on value, not vendetta
l And yes, less emotion, more action
“CIRP is not a blame game. It's a last shot at revival. And that requires every player to show up with honesty.” In the next article, we'll go behind the scenes of how Resolution Plans are made -- and unmade.
Who's bidding, what makes a plan "viable," and how value is negotiated when time is ticking. The writer is a Chartered Accountant and Company Secretary, currently works with one of the big four consulting firms.