How to Prepare an Information Memorandum as a Resolution Professional Under the Insolvency and Bankruptcy Code

The information memorandum (IM) is one of the most critical documents in the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). Prepared by the resolution professional (RP), it serves as the primary disclosure instrument that enables prospective resolution applicants to evaluate the corporate debtor and formulate their resolution plans. This guide walks through the legal requirements, practical steps, and key considerations involved in preparing a comprehensive IM.

Step 1: Understand the Legal Framework

The obligation to prepare the IM arises from Section 29(2) of the IBC, which requires the resolution professional to prepare an information memorandum in a form and manner specified by the IBBI. Regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) prescribes the detailed contents and timeline for the IM.

Timeline: The RP must provide the IM in electronic form to each member of the committee of creditors (CoC) within two weeks of appointment. Following the Fifth Amendment to the CIRP Regulations (effective July 4, 2025), the RP must provide the IM to each CoC member on or before the ninety-fifth day from the insolvency commencement date and must include all subsequent updates.

In practice: Start compiling information from day one of your appointment. The two-week deadline is tight, especially for large corporate debtors with complex business structures. Assign a dedicated team member to manage IM preparation as a standalone workstream.

Step 2: Gather the Required Information

Regulation 36(2) prescribes a comprehensive list of items that the IM must contain. These can be organized into the following categories.

Financial Information

• Assets and liabilities of the corporate debtor with such description as on the insolvency commencement date as are reasonably required for ascertaining their values

• The latest annual financial statements

• Audited financial statements of the corporate debtor for the two years preceding the insolvency commencement date

• Provisional financial statements for the current financial year, prepared before the insolvency commencement date

• A list of creditors with the amounts claimed by them, amounts admitted, and security interests held, if any

Operational Information

• Particulars of the corporate debtor, including its registered office, principal business activities, and details of the management

• Details of joint development arrangements, if any

• Description of the going concern value drivers of the corporate debtor's business

• Details of employees, including their liabilities and obligations

Legal and Compliance Information

• Details of material litigation and ongoing investigations against the corporate debtor

• Details of guarantors, if any

• Details of significant shareholders and related party transactions

• Details of assets under attachment or subject to any encumbrance

• Receivables of the corporate debtor with particulars

Avoidance Transactions (Post-Fifth Amendment)

Following the Fifth Amendment to the CIRP Regulations, the IM must now mandatorily disclose details of all identified avoidance transactions under Regulation 36(2)(ha). This includes preferential transactions (Section 43 of the IBC), undervalued transactions (Section 45), extortionate credit transactions (Section 50), fraudulent trading (Section 66(1)), and wrongful trading (Section 66(2)). The IM must also include details of applications filed before the Adjudicating Authority in respect of these transactions.

In practice: Conduct a systematic review of all transactions entered into by the corporate debtor during the look-back periods prescribed under each avoidance provision. For preferential transactions, the look-back period is two years before the insolvency commencement date (one year for transactions not with related parties). For undervalued transactions, it is also one year (two years for related party transactions). Document your findings methodically and include even those transactions where the determination is preliminary, as the disclosure obligation covers all identified transactions.

Step 3: Obtain and Verify Source Documents

The reliability of the IM depends on the quality of its underlying sources. The RP should obtain and cross-verify the following documents:

• Financial records: audited balance sheets, profit and loss accounts, cash flow statements, tax returns, bank statements, and management information system (MIS) reports

• Corporate records: memorandum and articles of association, board and shareholder resolutions, statutory registers, ROC filings, and annual returns

• Contractual records: material contracts, lease agreements, loan agreements, security documents, and guarantees

• Litigation records: pending cases before courts, tribunals, and regulatory authorities, along with legal opinions obtained by the corporate debtor

• Valuation reports: any pre-existing valuation reports, property valuation certificates, and plant and machinery appraisals

Where records are incomplete or unavailable, the RP should note these gaps in the IM and explain the steps taken to obtain the missing information. The Supreme Court in Anuj Jain v. Axis Bank Limited, (2020) 8 SCC 401, emphasized the importance of comprehensive disclosure in the CIRP, and any material omission in the IM could expose the RP to regulatory action.

Step 4: Structure the Information Memorandum

While the CIRP Regulations do not prescribe a fixed format for the IM, a well-structured document should generally follow this sequence:

1. Executive summary: A high-level overview of the corporate debtor, the CIRP timeline, and the key financial metrics

2. Corporate overview: History, ownership structure, management, registered office, and principal business activities

3. Industry and market analysis: A brief assessment of the industry in which the corporate debtor operates, including market position and competitive landscape

4. Financial analysis: Detailed financial statements, key ratios, and analysis of financial performance trends

5. Asset schedule: Comprehensive list of all assets with descriptions, locations, valuations, and encumbrances

6. Creditor details: Complete list of financial and operational creditors with admitted claims and security interests

7. Avoidance transactions: Details of all identified avoidance transactions as required by Regulation 36(2)(ha)

8. Litigation summary: Pending material cases and their potential financial impact

9. Employee details: Headcount, key positions, employee liabilities, and pending labour disputes

10. Going concern assessment: Value drivers and key factors relevant to the continuation of business

Step 5: Address Confidentiality Requirements

Section 29(2) of the IBC requires the RP to share the IM only after receiving an undertaking from each recipient. The undertaking must confirm that the recipient will maintain confidentiality of the information, will not use it to cause undue gain or loss to itself or others, and will comply with the requirements of the IBC.

Regulation 36(4) further requires that the confidentiality undertaking be obtained from each CoC member and each prospective resolution applicant before the IM is shared.

In practice: Prepare a standard confidentiality undertaking template early in the CIRP. Circulate it to CoC members before the IM is ready so that the undertakings are signed and returned by the time the IM is finalized. For prospective resolution applicants, the undertaking should be part of the expression of interest (EOI) process so that the IM can be shared promptly upon receipt of a valid EOI.

Step 6: Provide Updates and Supplements

The IM is not a static document. The Fifth Amendment to the CIRP Regulations explicitly requires the RP to include subsequent updates in the IM. This means that any material change in the corporate debtor's financial position, legal status, or operational profile during the CIRP must be communicated to the CoC and prospective resolution applicants.

Common triggers for IM supplements include changes in the claims admitted by the RP, disposal or acquisition of assets during the CIRP, new litigation or regulatory orders against the corporate debtor, identification of additional avoidance transactions, and material changes in the going concern value of the business.

The NCLAT in Vijay Kumar Jain v. Standard Chartered Bank, (2019) 20 SCC 455 (Supreme Court), affirmed that the information memorandum must be shared with all members of the CoC and that the right to access this information is fundamental to the CoC's decision-making function under the IBC.

Step 7: Final Review and Circulation

Before circulating the IM, conduct a final review to ensure completeness of all mandatory disclosures under Regulation 36(2), accuracy of financial data by cross-referencing with audited statements, proper documentation of all avoidance transactions as required by the Fifth Amendment, consistency between different sections (for example, the asset schedule and the financial statements), and redaction of any genuinely confidential information that is not required to be disclosed.

Circulate the IM electronically to all CoC members and maintain a log of the date, time, and mode of delivery. For prospective resolution applicants, share the IM through a secure virtual data room where access can be tracked and controlled.

Sources and References

• Insolvency and Bankruptcy Code, 2016, Sections 29 and 43 to 66

• IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, Regulation 36

• IBBI (CIRP) (Fifth Amendment) Regulations, 2025

• Anuj Jain v. Axis Bank Limited, (2020) 8 SCC 401 (Supreme Court)

• Vijay Kumar Jain v. Standard Chartered Bank, (2019) 20 SCC 455 (Supreme Court)

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers should consult qualified legal professionals for advice specific to their circumstances.