Insolvency Resolution Process for Corporate Persons Simplified
The Insolvency and Bankruptcy Board of India (“IBBI”) has amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2018 (“Regulations”) via notification dated October 05, 2018 (“Amendment Notification”). The major changes brought by the Amendment Notification in the Regulations are as follows:
- The definition of ‘Dissenting Financial Creditors’ has been removed from the Regulations;
- The resolution professional (“RP”) is now required to circulate the minutes of the meeting to the authorized representative of the class of creditors too (if any), along with all members of the ‘committee of creditors’ within forty-eight hours of the conclusion of the meeting;
- The authorized representative of a particular class of creditors is required to circulate the minutes of the meeting received from the RP to the financial creditors in that particular class. He shall also announce the voting window to vote and decide on the matter discussed in such meeting at least 24 hours before the window opens and shall keep the voting window open for at least 12 hours;
- The amount due to ‘operational’ creditors under the resolution plan shall be paid in priority over ‘financial’ creditors;
- The prospective resolution applicant is no longer required to give an undertaking that it will provide for additional funds, if required to pay the insolvency resolution process costs, liquidation value due to operational creditors and liquidation value due to dissenting financial creditors; and
- A duty has been conferred on the interim resolution professional or the RP, as the case may be, to preserve a physical as well as an electronic copy of the records relating to corporate insolvency resolution process of the corporate debtor.