How to File a Vendor Claim Bankrupt IT Company A Strategic Guide

Did you know that across industries, up to 60 per cent of vendor debts often remain unresolved in insolvency cases? If you are supplying services to a floundering IT firm, time is running out, but there is a structured solution. As a business leader, you need a clear path to recovery. This comprehensive guide explains how to file a vendor claim bankrupt IT company, guiding you through the critical steps of the Insolvency and Bankruptcy Code (IBC) to reclaim what you are owed.

The Challenge of IT Insolvency for Vendors

When an IT company goes bankrupt, vendors frequently face significant financial losses from unpaid invoices and disrupted contracts. This can cause a major cash flow crisis and put immense strain on your business. The IT sector’s rapid growth, projected to reach over $350 billion in India by 2026, also brings a higher risk of over-leveraging and market volatility. According to a quarterly report from the Insolvency and Bankruptcy Board of India (IBBI), IT firms accounted for approximately 12% of all corporate insolvency cases admitted by March 2025. This makes understanding how to file a vendor claim bankrupt IT company not just useful, but absolutely essential for your bottom line.

The Legal Framework Your Path to an IBC Creditor Claim

Under the Insolvency and Bankruptcy Code (IBC), a structured legal framework exists for creditors, including vendors, to file claims and recover dues from bankrupt enterprises. Your vendor claim bankrupt IT company is officially recognised as an IBC creditor claim. The process is overseen by an appointed Resolution Professional (RP) who manages the corporate debtor’s affairs and verifies all claims.

A key part of this process is Form B, which you must use as an operational creditor to lodge your claim. Form C is specifically for financial creditors such as banks. The public announcement of the insolvency will provide you with the RP’s details and the deadline to submit your claim. You must act swiftly, as missing this deadline can put your claim at risk.

Step-by-Step: Filing a Vendor Claim Bankrupt IT Company

Follow these steps to ensure you file your claim correctly and on time.

1 Identify the Insolvency Status

Confirm whether the IT company is officially under the IBC. Track updates through the Insolvency and Bankruptcy Board of India (IBBI) or the National Company Law Tribunal (NCLT) portal. This ensures you are dealing with an official insolvency process and can engage with the correct Resolution Professional.

2 Prepare Your Documentation

Gather all evidence of your transactions with the bankrupt IT company. This includes invoices, contracts, purchase orders, delivery notes, and relevant communication. A strong, well-documented paper trail is your greatest asset and is crucial for a successful vendor claim bankrupt IT company. Incomplete records often lead to rejection or delays, as IBBI data shows that 68% of operational creditors’ claims are admitted when backed by robust documentation, compared to just 23% for poorly documented claims.

3 Complete and Submit Form B

Under the IBC, as an operational creditor, you must fill out Form B (Proof of Claim by Operational Creditors). This form requires precise details: payee information, outstanding amount, nature of the claim, and supporting evidence. Submit this form to the Resolution Professional (RP) within the stipulated deadline.

4: Track Your Claim Status

Once you submit your claim, actively monitor communications from the RP. Be ready to respond promptly to any queries or disputes. Regular follow-ups ensure your claim stays on track and you do not miss critical updates.

5: Understand the Committee of Creditors (CoC) and Recovery Process

The RP forms a Committee of Creditors (CoC) to evaluate resolution plans for the bankrupt company. While vendors, as operational creditors, typically do not have voting rights, staying informed helps you understand settlement strategies. The recovery of your dues will follow a distribution plan set by the IBC, which prioritises creditors based on a predefined hierarchy. For example, a McKinsey study on India’s insolvency reforms estimates that streamlined processes could boost creditor recovery rates by 15–20% by 2027.

Data-Backed Insights and Expert Perspective

In 2023, India’s IBC saw recovery rates average around 37 per cent, with slight variation across sectors such as IT. This serves as a realistic benchmark for vendors. A McKinsey-style analysis suggests that a unified approach can significantly improve outcomes.

Anil Sharma, a seasoned insolvency consultant at Deloitte India, notes: “Vendors must act swiftly and ensure their Form B is error-free. Missing deadlines or submitting incomplete forms can exclude you from the resolution process. Without diligent documentation and timely filing, your vendor claim bankrupt IT company risks slipping through unnoticed.”

Real-World Example

When a mid-sized IT vendor supplied hardware to a now-bankrupt Indian IT firm, they were owed ₹2 crore. By promptly filing their vendor claim bankrupt IT company using Form B, the vendor recovered 70% of their dues within 18 months. Their success was a direct result of meticulous records and proactive engagement with the RP a strategy any vendor can replicate.

What’s Next: Emerging Trends and Actionable Recommendations

The IT insolvency and debt recovery landscape is evolving. Vendors can prepare for these trends:

• Increased IBC Efficiency: Amendments to the IBC are expected to shorten resolution timelines, benefiting vendors with quicker recovery.
• Digitalisation of Claims: Platforms are emerging that allow vendors to submit, track, and manage their vendor claim bankrupt IT company electronically, reducing errors and delays.
• Data-Driven Creditor Alliances: Vendors are increasingly using shared analytics to prioritise claims strategically and increase leverage in CoC negotiations.

Actionable Takeaways for Business Leaders

• Act Fast: Monitor the financial health of your clients and file your claim as soon as insolvency is announced.
• Document Everything: Maintain clear records of all transactions to support your IBC creditor claim.
• Consult Experts: Engage legal or financial consultants to navigate the complexities of IT insolvency.
• Stay Engaged: Regularly communicate with the RP to track your claim’s progress.
• Diversify Clients: Reduce your risk by spreading business across multiple clients, minimising exposure to a single IT firm’s bankruptcy.

Conclusion: Secure Your Future in a Volatile Industry

Filing a vendor claim bankrupt IT company is not just about recovering dues it is about safeguarding your business’s future. With the right form, diligent documentation, and a strategic approach, vendors can turn a financial crisis into a structured recovery opportunity. As insolvency systems evolve with digital tools and smarter dispute resolution, your preparedness today shapes your prospects tomorrow.

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