Changes in the Powers of Liquidator and Procedure of Valuation of Assets
IBBI (Liquidation Process) Regulations, 2016 has been amended by IBBI via notification dated October 22, 2018 (“Amendment Notification”). The changes brought by the Amendment Notification are as follows:
- ‘Business’ of the company is included in the definition of the ‘Assets’ of the company.
- The liquidator has been given the power to sell the the business of the corporate debtor as a going concern. However, if there is an asset of the corporate debtor which is subject to any security interest, it shall not be sold by the liquidator, unless the security interest therein has been relinquished by the security holder;
- The liquidator has also been asked to consider the average of the estimates of values arrived in the valuations performed under any insolvency resolution process, to do the valuation of assets or business intended to be sold by him; and
- A ‘relative’ of the liquidator, a ‘related’ party of the corporate debtor, an ‘auditor’ of the corporate debtor and a ‘partner’ or ‘director’ of the insolvency professional entity of which the liquidator is a partner or director cannot be appointed as registered valuers.