In exercise of the powers conferred by clause (t) of sub-section (1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 by Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020.
What does this amendment say?
i.As per the amendment, the three Insolvency Professionals (IP) offered by the interim resolution professional during the process of the appointment of an authorised representative (AR) by the Adjudicating Authority to represent financial creditors in a class, must be from the State or Union Territory, which has the highest number of creditors in the class as per records of the corporate debtor.
- This will facilitate ease of coordination and communication between the AR and the creditors in the class he represents.
ii.The AR will seek voting instructions from creditors in a class only after circulation of minutes of meeting and vote accordingly as compared to the earlier two stages, namely, (i) before the meeting; and (ii) after circulation of minutes of meeting.
iii.As per the norms, the committee of creditors (CoC) evaluate all compliant resolution plans as per evaluation matrix to identify the best of them and may approve it. Now after amendment, the CoC can vote on all compliant resolution plans simultaneously after evaluation providing the resolution plan, which receives the highest votes, should not be less than 66% of voting share shall be considered as approved.
About IBBI:
It is the regulator for overseeing insolvency proceedings and entities like Insolvency Professional Agencies (IPA), Insolvency Professionals (IP) and Information Utilities (IU) in India.
Chairperson– MS Sahoo
Headquarter– New Delhi
