Corporate Insolvency and Restructuring

We advise businesses on both sides of financial distress: the restructuring side, where a company can still be saved, and the liquidation side, where winding down is the only realistic path. Over the years we have guided investors, companies, creditors, liquidators and other stakeholders through restructurings and formal insolvency proceedings.

The Legal Framework

Corporate insolvency in Nepal runs primarily through the Insolvency Act, 2063 (2006), together with Chapter 10 of the Companies Act, 2063 (2006), which governs voluntary liquidation. Banks and financial institutions fall outside this general framework and are handled under the Bank and Financial Institution Act, 2073 (2017).

The Insolvency Act takes a “one law, two systems” approach, covering both liquidation and restructuring under a single statute. Proceedings cannot begin without a court order and are heard by the Commercial Bench of the High Court. Once proceedings start, an insolvency practitioner manages the process alongside a committee of creditors and, where directed, the Insolvency Administration Office. Voluntary liquidation, by contrast, runs through the Companies Act and the Office of the Company Registrar and applies when a solvent company’s shareholders decide to wind up.

Which regime applies, and which route serves the client best, depends on whether the company can genuinely be rescued, how creditors are likely to respond and what the financial picture looks like once examined closely.

What We Do

Assessing the financial position: establishing what is owed, to whom, and what assets exist before recommending a strategy.
Restructuring strategy: where a path back to solvency exists, a plan that limits the impact of distress and keeps the business viable, working with accountants and independent experts.
Liquidation proceedings: guiding clients through voluntary or court-supervised liquidation in coordination with the liquidator, courts and public authorities.
Creditor representation: protecting creditor claims and navigating the priority order for distribution of assets.
Cross-border recovery and asset tracing: advice on recovery options and asset freezes where assets or debtors sit outside Nepal.
Avoidance actions: challenging pre-insolvency transactions that unfairly disadvantaged creditors.
Regulatory and commercial advisory: handling the wider legal questions that surface alongside the insolvency itself.

Matters like these are rarely won on legal argument alone. They depend on coordinating everyone with a stake in the outcome, from accountants and liquidators to courts and creditors, toward a resolution that holds.