The IBC amended vide the Insolvency and Bankruptcy (Amendment) Act, 2019
By INSOL India Editorial
Posted On : September 18, 2019
The President of India on August 05, 2019 assented to the Insolvency and Bankruptcy (Amendment) Act, 2019 (“Amendment Act”). The Amendment Act was brought in force with an aim to ensure that the Insolvency and Bankruptcy Code, 2016 (“Code”) is more robust and fills in critical gaps in the corporate insolvency resolution framework, payments received by operational creditors under a resolution plan, manner of voting by an authorised representative on behalf of a class of financial creditors while simultaneously maximizing value of a corporate debtor undergoing its corporate insolvency resolution process (“CIRP”).
Some of the key amendments introduced by the Amendment Act are as follows -
(a) The Amendment Act provides that CIRPs under the Code are mandatorily required to be completed within a period of 330 days. This period will also include any extension granted by the adjudicating authority under the Code and any time taken in legal proceedings in relation to the CIRPs.
(b) The erstwhile requirement of payment of at least liquidation value to dissenting financial as per the CIRP regulations, which was deleted pursuant to NCLAT judgment, has now been made part of the Code. The Amendment Act has also made the liquidation distribution waterfall as specified in Section 53 of the Code, applicable to payments to be made to operational creditors and dissenting financial creditors in a CIRP.
(c) The Amendment Act empowers the committee of creditors (“COC”) to also decide the manner of distribution of resolution amount proposed under a resolution plan and not only the feasibility and viability of a resolution plan.
(d) The COC has also been empowered to decide to liquidate the corporate debtor, any time after constitution of the constitution of the COC and before the confirmation of the resolution plan.
For the full text of the Amendment Act, please refer to the link
For more details please visit https://ibbi.gov.in/uploads/legalframwork/630af836c9fbbed047c42dbdfd2aca13.pdf
