IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2019 modifies provisions related to Resolution Plans

Jan 25, 2019 | by Avantis RegTech Legal Research Team

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The Insolvency and Bankruptcy Board of India (IBBI) on January 24, 2019 has published the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2019 further to amend the provisions related to the Resolution Plan in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

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

·         In Regulation 36B which specifies the procedure for obtaining request for Resolution Plan, after sub-regulation (4), the following sub-regulation shall be inserted, namely:

“(4A) The request for resolution plans shall require the resolution applicant, in case its resolution plan is approved under sub-section (4) of section 30, to provide a performance security within the time specified therein and such performance security shall stand forfeited if the resolution applicant of such plan, after its approval by the Adjudicating Authority, fails to implement or contributes to the failure of implementation of that plan in accordance with the terms of the plan and its implementation schedule.

Explanation I – For the purposes of this sub-regulation, “performance security” shall mean security of such nature, value, duration and source, as may be specified in the request for resolution plans with the approval of the committee, having regard to the nature of resolution plan and business of the corporate debtor.

Explanation II – A performance security may be specified in absolute terms such as guarantee from a bank for Rs. X for Y years or in relation to one or more variables such as the term of the resolution plan, amount payable to creditors under the resolution plan, etc.”.

·         In Regulation 38 which specifies the Mandatory contents of the resolution plan, after sub-regulation (1A), the following sub-regulation shall be inserted, namely:

“(1B) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past.”.

·         In Regulation 39 which specifies the procedure for Approval of resolution plan:

               i.            In Sub-regulation (4) Form H of the Schedule shall be substituted;

             ii.            After Sub-regulation (8), the following sub-regulation shall be inserted, namely:          

“(9) A creditor, who is aggrieved by non-implementation of a resolution plan approved under sub-section (1) of section 31, may apply to the Adjudicating Authority for directions.”.

[Notification No. IBBI/2019-20/GN/REG040]

 

URL: https://ibbi.gov.in/webadmin/pdf/whatsnew/2019/Jan/CIRP%20amendment%20regulation%2024-01-2019%20-4_2019-01-24%2019:07:55.pdf


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