Yes, a debtor company can continue to operate during bankruptcy and insolvency proceedings, and whether it does so often depends on the circumstances and the decisions made during the process. Here are some key considerations regarding the continued operation of a debtor company during bankruptcy and insolvency proceedings: Maintaining Business Operations: Business as Usual: In many cases, it is in the best interest of all parties involved, including creditors and employees, to keep the debtor company's business operations running. This can help preserve the value of the company's assets, maintain customer relationships, and generate income to fund the insolvency process. Appointment of an Insolvency Professional: When insolvency proceedings are initiated, an insolvency professional (IP) or resolution professional (RP) is typically appointed to take control of the debtor company's affairs. The IP/RP assesses the financial situation, manages day-to-day operations, and explores opportunities to improve the company's financial position. Approval of Resolution Plan: Restructuring the Business: If a viable resolution plan is approved during the insolvency process, it may involve restructuring the debtor company's operations. This could include modifying contracts, renegotiating debt terms, or selling non-core assets. Business Continuation: In some cases, the approved resolution plan allows the debtor company to continue operating under new ownership or management, provided it can meet its financial obligations and demonstrate viability. Liquidation and Closure: Liquidation: If a resolution plan is not feasible or approved, the insolvency process may lead to the liquidation of the debtor company's assets. In this scenario, the company's operations would eventually cease, and its assets would be sold to repay creditors. Stages of Liquidation: Even in the case of liquidation, the debtor company may continue to operate for a limited period to facilitate the sale of assets and fulfill existing contracts, as long as it is financially feasible and in the best interest of creditors. Moratorium Period: Moratorium Protection: The initiation of insolvency proceedings often triggers a moratorium period during which creditors are prevented from taking legal actions against the debtor company. This provides some breathing space for the company to assess its situation and determine the best course of action. NCLT Oversight: Monitoring by the NCLT: In the case of corporate insolvency proceedings in India, the National Company Law Tribunal (NCLT) oversees the insolvency process and may issue directions regarding the continuation of business operations, asset management, and other matters. Ultimately, the decision to continue operating a debtor company during bankruptcy and insolvency proceedings depends on factors such as the company's financial condition, the prospects for a successful resolution plan, and the interests of creditors and other stakeholders. The insolvency professional and the NCLT play key roles in determining the company's fate and ensuring that the process is carried out in accordance with the applicable laws and regulations.