The Insolvency and Bankruptcy Board of India (“IBBI”) introduces amendments to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”)
By INSOL India Editorial Board Posted On : September 18, 2019
The IBBI has introduced certain amendments to the CIRP Regulations vide the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2019 which came into force on July 25, 2019 (“CIRP Amendment Regulations”).
Some of the key features of the CIRP Amendment Regulations are as follows -
(a) Applications for withdrawal of corporate insolvency resolution processes can now be filed prior to constitution of the committee of creditors (through the interim resolution professional) and after the constitution of the COC (by the applicant through the interim resolution professional). It has been clarified that withdrawal applications may be filed after the issuance of the expression of interest, provided that the applicant provides reasons justifying withdrawal of the CIRP. Bank guarantees are also required to be provided along with the withdrawal applications towards the estimated expenses incurred by the interim resolution professional.
(b) The COC is required to record its deliberation of the feasibility and viability of resolution plans presented before it.
(c) In case the COC decides to liquidate the corporate debtor, the COC is required to make a best estimate of the amount required to meet liquidation costs, in consultation with the resolution professional. In the event that the value of the liquid assets is less than the estimated liquidation costs, the COC is required to approve a plan providing for contribution for meeting the difference between the two.
(d) While making the decision of whether to approve a resolution plan or to liquidate a corporate debtor, the COC is now required explore options of selling the corporate debtor as a going concern.
For the full text of the CIRP Amendment Regulations, please refer to the link
For more details please visit https://ibbi.gov.in/webadmin/pdf/whatsnew/2019/Jul/CIRP%2025072019_2019-07-25%2020:15:02.pdf