Insolvency and Bankruptcy Board of India has made the following changes in the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
A. IBBI Notification No. IBBI/2022-23/GN/REG091- 3rd Amendment *effective from 13.09.2022*
1.Fee to be paid to IRP and RP: Regulation 34B has been inserted which states that Fee of IRP or RP shall be decided by the applicant or committee in accordance with this regulations. Insolvency professional shall be paid minimum fixed fee in the range of one lakh rupee to five lakh rupees, per month, depending on the quantum of claims admitted, as specified under Table-1 of Schedule-II of amendment regulations. However, the applicant or committee may decide to fix higher amount of fees than the said minimum fixed fee, after taking into consideration market factors such as size and scale of business operations of corporate debtor, business sector in which corporate debtor operates, level of operating economic activity of corporate debtor and complexity related to process. Further those plan approved by the committee on or after 1st October 2022, the committee may decide, in its discretion, to pay performance-linked incentive fee, not exceeding five crore rupees.
B. IBBI Notification No. IBBI/2022-23/GN/REG093- 4th Amendment *effective from 16.09.2022*:
2.Process Specific E-Mail ID: Regulation 4C has been added after regulation 4B which states that IRP shall open an email account for the correspondences with the stakeholders and in case of his replacement he shall share the credentials with RP and in case of RP replacement with another RP or liquidator then handover of such credentials to such RP or liquidator.
3.Communication to each creditors regarding submissionof claims: A new Regulation 6A has been inserted which states that IRP shall send communication along with copy of public announcement to the creditors as per the last available books of accounts of the corporate debtor by way of electronic means or by post. Where it is not possible to send communication then such public announcement shall be deemed to be communicated to such creditors.
4.Meeting of COC can be convened post submission of Resolution plan to AA: Explanation to Regulation 18 is added which provides that COC meeting maybe convened for matters which does not affects plan submitted before AA till the resolution plan is approve or liquidation order is passed.
5.PUEF applications filing time reduced to 130 days from ICD (Earlier it was 135 days from ICD) : Timelines for filing application for preferential transaction has been changed to 130 days from the Insolvency Commencement date which was earlier 135 days.
6.PUEF application to be given to PRA’s: Regulation 3A has been added in Regulation 35A which states that resolution professional shall forward a copy of the application to the prospective resolution applicant to enable him to consider the same while submitting the resolution plan within the time initially stipulated.
7.IM submission time increased to 95 days (Earlier it was 54 days from ICD): Timeline for submitting IM is been changed from 54th day from Insolvency Commencement date to 95th day from the Insolvency Commencement date.
8.Detailed IM to be prepared: Information memorandum should also include further relevant information such as operations of CD, financial statements, contingent liabilities, geographical coordinates of fixed assets, company overview. It also includes details of business evolution for CDs with asset size of more than Rs.100 crore.
9.Form-G issuance time reduced to 60 days from ICD (Earlier it was 75 days from ICD) : Time for invitation for expression of interest in Form G has been advanced to 60th day from insolvency commencement date (ICD).
10.Sale of one or more assets of the CD to one or more PRA’s allowed under CIRP : Regulation 36B(6A) has been inserted which states that If the resolution professional, does not receive a resolution plan in response to the request under this regulation, he may, with the approval of the committee, issue request for resolution plan for sale of one or more of assets of the corporate debtor. Further Regulation 37(1)(m) now allows sale of one or more assets of corporate debtor to one or more successful resolution applicants submitting resolution plans for such assets
11.Strategy Marketing of assets: Regulation 36C has been introduced which provides for formulating a strategy for marketing of assets of CD in consultation with the CoC to disseminate information about the asset to a wider and targeted audience of potential resolution applicants.
12.Assessment of compromise or Arrangement: Regulation 39BA has been introduced which allows CoC to examine whether it wants to explore option of compromise or arrangement and file such recommendation with AA while applying to AA for liquidation order
13.Decision for liquidation: Regulation 40D has been inserted which states that COC while considering liquidation may consider factors including but not limited to non-operational status for preceding three years, goods produced or service offered or technology employed being obsolete, absence of any assets, lack of any intangible assets orfactors which bring value as a going concern over and above the physical assets like brand value,intellectual property, accumulated losses, depreciation, investments that are yet to mature and such consideration may be submitted and recorded in the liquidation application.
14.New format for Form-G issued: Form-G for invitation of expression of interest has been substituted with new Form-G
C. IBBI Notification No. IBBI/2022-23/GN/REG096- 5th Amendment *effective from 01.10.2022*
15.Regulatory fee to the IBBI: Resolution plan approved On or after 1st October Where realizable value is more than the liquidation value in the resolution plan then a regulatory fee calculated at the rate of 0.25% of the realisable value to creditors shall be payable to the board. A Regulatory fee calculated at the rate of one per cent of the cost being booked in insolvency resolution process costs in respect of hiring any professional or other services by the IRP or RP , for assistance in a CIRP shall be payable to the Board in the manner as specified in clause (cb) of sub-regulation (2) of regulation (7) of the IBBI (CIRP) Regulations 2016.
Amended Regulation:
