IBBI Discussion paper on amendments to IBBI (Insolvency Resolution Process for Corporate Process) Regulations, 2016
The IBBI has issued a Discussion paper on amendments to Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Process) Regulations, 2016 which solicits comments on issues such as Approval of Committee of Creditors (CoC) for insolvency resolution process cost, Monthly CoC meetings, Discussion of valuation methodology and report with CoC, Disclosure of valuation reports, Continuation of process activities pending disposal of extension application by the Adjudicating Authority (AA), Clarity in minimum entitlement to dissenting financial creditors; and Mandatory contents of resolution plan.
It is proposed the insolvency professional (IP) should seek approval of Committee of Creditors (CoC) of all components of the insolvency resolution process cost, including the expenditure incurred for ongoing operations of the Corporate Debtor (CD). The IBC 2016 (Code) acknowledges the cost incurred by RP to keep the business of the CD as a going concern. But to streamline the process and improve the monitoring of the CoC on the CIRP process, it is considered necessary to explicitly provide that RP has to take approval of CoC for all the insolvency resolution process cost incurred by the RP.
To review the work/progress of the CIRP by CoC, RP be mandated to conduct the meetings of CoC every month.
It is also proposed that before finalisation of valuation report, valuers shall explain the valuation methodology to the members of the committee in a meeting facilitated by the RP.
