Important Amendment Regulations introduced to Corporate Insolvency Resolution Process
The Insolvency and Bankruptcy Board of India (IBBI) has issued the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2018. The key aspects of these amendments (3rd Amendment) Regulations, 2018 are as follows:
Application for Withdrawal:
- An application to withdraw an admitted application under the Insolvency and Bankruptcy Code can be submitted to the Interim Resolution Professional (IRP) or Resolution Professional (RP) before the invitation for Expression of Interest (EoI) is issued.
- This withdrawal requires approval from the Committee of Creditors (CoC) with a 90% voting share.
Role of IRP in Absence of Resolution Professional :
- If there is a delay in appointing the Resolution Professional, the IRP shall take on the Resolution Professional’s functions from the 40th day after the commencement of insolvency until an Resolution Professional is appointed.
CoC Meetings:
- Modifications have been made regarding the notice period and the voting window for meetings of the CoC.
Appointment of Authorised Representative:
- The regulations specify the manner of appointing an authorised representative for creditors in cases where the corporate debtor has different classes of creditors, with at least ten creditors in each class.
Timelines for Transactions:
- The Resolution Professional is given a specific time limit to determine and apply for relief concerning preferential transactions, undervalued transactions, extortionate transactions, or fraudulent transactions.
Invitation for EoI:
- The Resolution Professional must publish an invitation for EoI by the 75th day from the insolvency commencement date.
- Any EoI received after the specified time shall be rejected.
- The timeline for issuing a provisional list of prospective resolution applicants has been specified.
Request for Resolution Plans:
- The Resolution Professional must issue the information memorandum, evaluation matrix, and request for resolution plans within five days of issuing the provisional list to the prospective resolution applicants.
- At least 30 days must be allowed for the submission of resolution plans.
- Further details regarding the request for resolution plans have been specified.
These amendments aim to streamline the insolvency resolution process, ensuring clarity and efficiency in handling corporate insolvency cases.
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