The Creditor Takes the Wheel: Control, Custody and the New Creditor-Initiated Insolvency Resolution Process

An analysis of the creditor-initiated insolvency resolution process (CIIRP) introduced by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, through a new Chapter IV-A (Sections 58-A to 58-K). A notified class of financial creditors can start the process out of court by appointing a resolution professional, without an admission order from the NCLT, while management remains with the debtor’s board under the professional’s supervision.

The article maps the process and examines its main fault-lines from the perspective of the debtor, the creditors and the statute as a whole: control and custody (Section 58-F), the application-based moratorium (Section 58-G), conversion into a full CIRP (Section 58-H), and the relocation of due process to a later objection stage (Sections 58-B and 58-C).

It concludes that CIIRP is best understood as supervised, reversible custody, and notes that the chapter still awaits notification of eligibility categories and the Board’s regulations.