IBC Regulations & Conduct of First & subsequent CoC Meeting

IBC Regulations & Conducting of First & subsequent CoC Meetings 

• First meeting of the CoC under IBC Regulation

The First Meeting of the CoC: The interim resolution professional shall hold the first meeting of the committee within 7 days of filing the report certifying constitution of the committee to the Adjudicating Authority under Regulation 17.[CIRP Reg.-17(2)].

• Reg 13 (1)

Interim resolution professional or the resolution professional, as the case may be, shall verify every claim, as on the insolvency commencement date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it.

• Reg 17 (1)

The interim resolution professional shall file a report certifying constitution of the committee to the Adjudicating Authority within two days of the verification of claims received under sub-regulation (1) of regulation 12.

• Subsequent meetings of CoC under IBC Regulation Reg 18

A resolution professional may convene a meeting of the committee as and when he considers necessary and shall convene a meeting if a request to that effect is made by members of the committee representing thirty-three per cent of the voting rights.

Subsequent meetings of CoC- Clarification issued by IBBI on April 16, 2021

Sl. No.	Situation	Action by RP
1.	Members of the CoC having at least 33% of the voting rights request the RP, along with a note, to convene a meeting of the CoC	The RP shall forthwith convene a meeting of the CoC for consideration of the note, or place the note for consideration in a meeting of the CoC, if it is already scheduled.
2.	Members of the CoC having at least 33% of the voting rights request the RP, along with a note, to place the note for consideration in a meeting of the CoC.	RP shall place the note for consideration in the ensuing meeting of the CoC.
3.	The Members of the CoC having less than 33% of the voting rights request the RP, along with a note, to convene a meeting of the CoC.	The RP shall consider the request expeditiously on merits. If he considers it necessary, he shall convene a meeting of the CoC for consideration of the note, or place the note for consideration in a meeting of the CoC, if it is already scheduled.
4.	Members of the CoC having less than 33% of the voting rights request the RP, along with a note, to place the note for consideration in a meeting of the CoC.	RP shall consider the request expeditiously on merits. If he considers it necessary, he shall place the note for consideration in the ensuing meeting of the CoC.

Notice Period- CoC Meeting under IBC Regulation

• Not less than 5 days
• The committee may reduce the notice period from five days to such other period of not less than twenty-four hours, as it deems fit,
• Provided that the committee may reduce the period to such other period of not less than forty-eight hours if there is any authorised representative.

Who should notice of CoC Meeting be served to

• Members of committee of creditors and authorised representatives
• The Members of the suspended Board of Directors or the partners of the corporate persons, as the case may be.
• Operational creditors or their representatives if the amount of their aggregate dues is not less than ten per cent of the debt.

How should the notice of CoC Meeting be served under IBC Regulation- Reg 19

• By hand delivery
• By-post.
• But in any event, be served on every participant by electronic means.

Service of notice by electronic mode under IBC Regulation- Reg 20

• Through e-mail as a text or as an attachment to e-mail or as a notification providing electronic link or URL for accessing such notice
• The subject line in e-mail shall state the name of the corporate debtor, the place, if any, the time and the date on which the meeting is scheduled
• In PDF with a ‘link or instructions’ for recipient for downloading relevant version of the software.
• Retain proof of sending
• RP not responsible for a failure in transmission beyond its control.
• If a participant, other than a member of the committee, fails to provide or update the relevant e-mail address to the resolution professional, the non-receipt of such notice by such participant of any meeting shall not invalidate the decisions taken at such meeting.

Contents of the notice for meeting under IBC Regulation Reg 21

• Notice to mention:
  • the venue, the time and date of the meeting and of the option available to them to participate through video conferencing or other audio and visual means, e.g., “Notice of the First meeting of the Committee of Creditors of ABC Ltd. To be held at (venue) on Monday, January 16, 2022 at 3:00 PM”
  • that a participant may attend and vote in the meeting either in person or through an authorised representative.

• a list of the matters to be discussed at the meeting,
• List of the issues to be voted upon at the meeting;
• copies of all documents relevant to the matters to be discussed and the issues to be voted upon at the meeting

Contents of Notice regarding Voting by Electronic Mode under IBC Regulation

• Notice shall state:
  • process and manner for voting by electronic means and the time schedule
  • the time period during which the votes may be cast
  • login ID and the details of a facility for generating password
  • contact details of the person who will address the queries connected with the electronic voting.

Quorum of CoC meeting under IBC Regulation-  Reg 22

• Quorum will be met if members of the committee representing at least thirty three percent of the voting rights are present
• Proviso: committee may modify the percentage of voting rights required for quorum in respect of any future meetings.

Lack of Quorum of CoC meeting under IBC Regulation

• Lack of Quorum will result in the meeting being adjourned to the same time and place the next day, unless otherwise decided.
• Adjourned meeting shall be quorate with the members of the committee attending the meeting.

Participation through video conferencing under IBC Regulation – Reg 23

• RP shall make necessary arrangements to ensure uninterrupted and clear video or audio and visual connection.
• The RP shall take due and reasonable care-
  • to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures.
  • Ensure availability of proper video conferencing or other audio and visual equipment or facilities for providing transmission of the communications for effective participation of the participants at the meeting.
  • to record proceedings and prepare the minutes of the meeting.
• to store for safekeeping and marking the physical recording(s) or other electronic recording mechanism as part of the records of the corporate debtor;
• Ensure that no person other than the intended participants attends or has access to the proceedings of the meeting through video conferencing or other audio and visual means; and
• to ensure that participants attending the meeting through audio and visual means are able to hear and see, if applicable, the other participants clearly during the course of the meeting:

Conduct of meeting under IBC Regulation – Reg 24

• RP’s responsibility at the meeting:
  • Chair the meeting;
  • Take roll call and inform participants of all the persons present
  • Ensuring quorum;
  • Maintaining quorum and integrity of meeting by not allowing unauthroised access to the venue of the meeting;
  • Recording Minutes and circulating the same within 48 hours of the meeting.
  • Minutes to disclose particulars of participants who participated in person, through video conferencing and through audio and visual means,

Actions requiring Creditors Approval under IBC Regulation – Reg 28

• RP to call meeting of CoC to seek vote on taking actions listed under Section 28 (1), namely:
  • raising interim finance;
  • creating security interest over assets of CD;
  • changing capital structure of CD; and
  • recording any change in the ownership interest of the CD,

Actions requiring Creditors Approval under IBC Regulation

• instructing financial institutions to make debit transaction from account(s) of the CD exceeding amount set by CoC;
• entering related party transactions;
• amending MoA/AoA of CD;
• delegating its authority to any other person;
• disposing of or permitting the disposal of shares of any shareholder of the corporate debtor or their nominees to third parties;
• transferring rights or financial debts or operational debts under material contracts otherwise than in the ordinary course of business;
• changing management of CD or its subsidiary;
• making changes in the appointment or terms of contract of such personnel as specified by the CoC; and
• making changes in the appointment or terms of contract of statutory auditors or internal auditors of the CD
• All such actions to only be taken when creditors holding at least 66% of the voting share consent to it

Agenda of the first meeting

A.  List of matters to be noted/ discussed
1.	To appoint IRP as Chairman of the meeting
2	To-take roll call of participants including those attending by video conferencing or other audio and visual means
3.	To take note of the CoC constituted by the IRP and voting share update on financial creditors
4.	To-ascertain the quorum of the meeting in accordance with Regulation 22 of the CIRP Regulations
5.	To take note of the actions taken by the IRP under Code
6.	To-take note of the claims received by the IRP
7.	To take note of the current state of business operations of the Corporate Debtor
8.	To-take note of all litigations pending with or threatened against the Corporate Debtor and other material disputes
9.	To-discuss and deliberate on the Information Memorandum
10.	To note and discuss the methodology of voting

 

B.       List of issues to be voted upon after discussions in the meeting
1.	To ratify and approve the expenses towards public announcement issued in relation to the CIRP
2.	To-confirm and approve the appointment of _______________ (Registration No. IBBI/IPA-___________) as the resolution professional (“RP”) of the Corporate Debtor along with his fees and expenses
3.	To ratify the fees and expenses of legal counsel and to approve their appointment and fee during the CIRP tenure
4.	To-take note and approve raising of interim finance

 

C. List of issues to be voted upon, subsequent to appointment of the RP by CoC
1.	To authorise the Resolution Professional to hold the future Meetings of the CoC at shorter notice of not less than 24 hours.
2.	To-approve the appointment of registered valuers as per Regulation 27 of the CIRP Regulations
D.                     Any other matter with the permission of the Chair

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