Provisions for document submissions to the Resolution Professional modified vide IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022

IBBI

On 14th June, 2022, Insolvency and Bankruptcy Board of India notifies Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022. This regulation seeks to amend the procedure of recording evidences, and applications made to ‘resolution professional’ by the creditors. 

 

Key Points: 

  • For the purpose of resolving the process of insolvency, creditors may furnish the relevant records of transaction/debt/default by operational creditor. 
  • For making such applications, copies of Form GSTR-1 and GSTR-3B under GST and e-way bill will have to be provided. For the successful submission of these applications the Operational creditors will require their PAN and e-mail. 
  • Documents of debtors are part of major evaluation while assessing their insolvency, while doing so the resolution professional may go through his documents under Regulation 4(1). 
  • With newly added provision Regulation 4 (2) and (3), the debtors are bound by law to provide relevant information for such evaluation. Along with the management personnel of debtors, creditors will have to provide records of assets and liabilities stock statements, valuation reports, etc., of the debtor. 
  • In the process of preparing information memorandum of the corporate debtor, the resolution professional with require from the creditors, under Regulation 35-A, the financial health for auditing his assets and liabilities.  
  • To find out the fair value/liquidation value two valuers are allotted to evaluate the inventories and fixed assets of the debtor. Under the Resolution Plan of these Regulation, Regulation 35 (1)(b) has been modified. 
  • After this evaluation, when two ‘significantly different’ [defined under Explanation (ii)] estimates are submitted from valuers, third valuer for ‘asset class’ [defined under Explanation (i)] is appointed. Both the terms are clearly defined by this amendment. 

 


*Shubhi Srivastava, Editorial Assistant has reported this brief. 

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