Corporate Insolvency and Restructuring

Bhandari Law's Kathmandu office advises 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 forward. We're regarded as one of the leading firms in Nepal for corporate insolvency work, with a team that genuinely knows this area of law rather than treating it as an occasional add-on to general corporate practice. Over the years, we've advised investors, companies themselves, creditors, liquidators, and other stakeholders through both restructuring situations and formal insolvency proceedings.

The Legal Framework

Corporate insolvency in Nepal runs primarily through the Insolvency Act, 2063 (2006), alongside Chapter 10 of the Companies Act, 2063 (2006), which governs voluntary liquidation. Banks and financial institutions sit outside this general framework — their liquidation is handled separately under the Bank and Financial Institution Act, 2073 (2017).

The Insolvency Act was built on what's often described as a "one law, two systems" approach — it covers both liquidation and restructuring under the same statute, rather than treating them as entirely separate legal regimes. Insolvency proceedings can't begin without a court order, and matters go before the Commercial Bench of the High Court. Once proceedings start, an insolvency practitioner is appointed to manage the process, working alongside a committee of creditors and, where the court directs it, the Insolvency Administration Office. Voluntary liquidation, by contrast, runs through the Companies Act and the Office of the Company Registrar, and applies where a solvent company's shareholders simply decide to wind things down.

Which regime actually applies to a given company — and which route serves the client's interests better — depends heavily on the specifics: whether the company can genuinely be rescued, how creditors are likely to respond, and what the underlying financial picture actually looks like once you dig into it.

What We Do

Our advice covers the full range of insolvency proceedings, litigation, and disputes that come up in this space — protecting creditor claims, cross-border recovery, asset freezes, advice on avoidance actions, and the broader regulatory, financial, and commercial issues that tend to surface alongside a company's financial troubles.

Assessing the Financial Position

We start by tracing the client's actual financial position — what's owed, to whom, and what assets exist — before recommending a strategy. Getting this picture right early on shapes everything that follows.

Restructuring Strategy

Where a company has a realistic path back to solvency, we build a strategy aimed at minimizing the impact of financial distress and keeping the business viable, working closely with accountants and independent expert committees along the way.

Liquidation Proceedings

Where restructuring isn't realistic, we guide clients through voluntary or court-supervised liquidation, coordinating with the appointed liquidator, the courts, and the relevant public authorities throughout.

Creditor Representation

We act for creditors seeking to protect their claims in an insolvency, including navigating the priority order that determines how remaining assets get distributed.

Cross-Border Recovery and Asset Tracing

Where assets or debtors sit outside Nepal, we advise on cross-border recovery options and asset freezes to protect a creditor's position.

Avoidance Actions

We advise on avoidance actions — challenging transactions made before insolvency that unfairly disadvantaged creditors.

Regulatory and Commercial Advisory

Insolvency rarely happens in isolation from a company's other legal obligations. We advise on the regulatory, financial, and commercial questions that come up alongside the insolvency itself.

Throughout a restructuring or insolvency matter, our lawyers work directly alongside accountants, independent expert committees, liquidators, public authorities, the courts, and creditors — because a matter like this is rarely won or lost on legal argument alone. It comes down to coordinating everyone with a stake in the outcome toward a resolution that holds up.

We assist affected parties across restructurings, reorganisations, and both solvent and insolvent liquidations — whichever side of the table a client sits on.

post comment