Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2018

Oct 23, 2018 | by Avantis RegTech Legal Research Team

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The Insolvency and Bankruptcy Board of India (IBBI) on October 22, 2018 has published the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2018 to further amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

Some of the major amendments in the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 are as under:

·         For Regulation 32 which specifies the manner of sale, the following regulation shall be substituted, namely:

32. Sale of Assets, etc.

The liquidator may sell:

a)      an asset on a standalone basis;

b)      the assets in a slump sale;

c)       a set of assets collectively;

d)      the assets in parcels;

e)      the corporate debtor as a going concern; or

f)       the business(s) of the corporate debtor as a going concern:

Provided that where an asset is subject to security interest, it shall not be sold under any of the clauses (a) to (f) unless the security interest therein has been relinquished to the liquidation estate.”.        

 

·         For Regulation 35 which specifies Valuation of assets intended to be sold, the following regulation shall be substituted, namely:

"35. Valuation of assets or business intended to be sold. 

(1)    Where the valuation has been conducted under regulation 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 or regulation 34 of the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017,  as the case may be, the liquidator shall consider the  average of the estimates of the values arrived under those provisions for the purposes of valuations under these regulations.  

(2)    In cases not covered under sub-regulation (1), the liquidator shall within seven days of the liquidation commencement date, appoint two registered valuers to determine the realisable value of the assets or businesses under clauses (a) to (f) of regulation 32 of the corporate debtor: 

Provided that the following persons shall not be appointed as registered valuers, namely:-  (a) a relative of the liquidator;  (b) a related party of the corporate debtor;  (c) an auditor of the corporate debtor at any time during the five years preceding the insolvency commencement date; or  (d) a partner or director of the insolvency professional entity of which the liquidator is a partner or director. 

(3)    The Registered Valuers appointed under sub-regulation (2) shall independently submit to the liquidator the estimates of realisable value of the assets or businesses, as the case may be, computed in accordance with the Companies (Registered Valuers and Valuation) Rules, 2017, after physical verification of the assets of the corporate debtor. 

(4)    The average of two estimates received under sub-regulation (3) shall be taken as the value of the assets or businesses.”.

 

The Regulations shall come into force on the date of the publication in the Official Gazette.

 

[No. IBBI/2018-19/GN/REG037]

 

URL: https://ibbi.gov.in/webadmin/pdf/whatsnew/2018/Oct/Revised%20Liquidation%20Process%20Amendment%20Regulations%20(3)%2022.10.2018_2018-10-22%2020:41:06.pdf


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