IBBI invites comments on Discussion Paper on Corporate Insolvency Resolution Process

May 10, 2019 | by Avantis RegTech Legal Research Team

The Insolvency and Bankruptcy Board of India (IBBI) on May 08, 2019, issues a discussion paper on Corporate Insolvency Resolution Process (CIRP). 

Withdrawal under section 12A:

Section 12A of the Insolvency and Bankruptcy Code, 2016, which provides that the Adjudicating Authority may allow the withdrawal of application admitted under section 7, 9 or 10 of the Code, on an application made by the applicant with the approval of 90% voting share of the committee of creditors. Based on several judgments on withdrawal, it is proposed to amend CIRP Regulations to allow withdrawal of an application at any time, (a) before constitution of CoC, (b) after constitution of CoC but before invitation of EoI, or (c) after invitation of EoI in exceptional cases, on an application made by the applicant.

Financial support to liquidator by members of CoC:

It is also proposed that the regulations may require the CoC to consider an agenda item, while rejecting a resolution plan or deciding to liquidate the CD, providing for liquidation expenses. It must consider the estimated amount of liquidated costs, the availability of liquid assets to meet liquidation costs, and balance amount required for meeting liquidation costs and require the secured institutional financial creditors to bring in upfront balance amount of liquidation cost, in an escrow account with a scheduled bank, within seven days of the liquidation order. 

IBBI is inviting comments from public on Discussion Paper on Corporate Insolvency Resolution Process to be submitted electronically at IBBI website, www.ibbi.gov.in by May 30, 2019.


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