IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023

28 Sep 2023
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What happened?
The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 on September 18, 2023.

The amendments have been introduced in order to make the process of corporate insolvency resolution smoother and with a view to curtail the scope of litigation.

Key Aspects and Implications
The key aspects which have been introduced are as follows:
(a) Regulation 2D: Details of debt, default and limitation in respect of applications under section 7 or section 9: This regulation mandates that a creditor, while filing an application under Section 7 or 9 of the Insolvency and Bankruptcy Code 2016 (as amended), has to set out the chronology of debt, default, part payments, limitation and date of acknowledgement of debt, along with the requisite evidence.
(b) Regulation 3A. Assistance and cooperation by the personnel of the corporate debtor: This regulation adds a provision regarding the assistance and cooperation expected from the personnel of the corporate debtor (CD) by providing a detailed procedure for taking custody and control of assets and records of the CD by the resolution professional (RP) including provisions for creating list and tracing the possession of assets and records of the CD.
(c) Amendments to Regulation 12 and Regulation 13: In order to reduce the burden on Adjudicating Authorities (AA), the amendments increase the timelines for creditors to file claims up to the date of issue of request for resolution plans under Regulation 36B or 90 days from the insolvency commencement date, whichever is later. The RP has also been empowered to give her view on the acceptance of claim for its collation even for claims submitted beyond this time and put such claims before the committee of creditors (CoC) to recommend their acceptance for inclusion in the list of claims and its treatment in the resolution plan before the same is adjudicated or condoned by the AA.
(d) Other amendments: The amendments also set out enhanced role and responsibilities of the authorised representative (AR) of creditors and include enhanced fees of AR, stipulate a fixed timeline for intimation to the RP of assignment of debt by a creditor, and to make the resolution process more transparent and robust, the amendment enables committee members to get an audit of the CD conducted and makes cost of such audit to be part of CIRP cost.

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