IRP for Corporate Persons

On 15-2-2024, the Insolvency and Bankruptcy Board of India (‘IBBI’) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2024 to amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The provisions came into force on 15-2-2024.

Key Points:

  1. Regulation 4-D has been inserted according to which if a corporate debtor has any real estate project, the interim resolution professional/ resolution professional will operate a separate bank account for each real estate project.

  2. Regulation 18 relating to “Meetings of the committee” has been revised.

    Earlier, the meeting of the committee of creditors (‘committee’) was convened whenever the resolution professional thinks it necessary.

    Now, the meeting must be convened 30 days from the last meeting. The interval between the meetings can be extended by the committee so that at least one meeting is held in each quarter.

  3. Regulation 25 relating to “Voting by the committee” has been revised.

    Earlier, the resolution professional, after circulating the minutes of the meeting, was supposed to seek votes of those members who did not vote at the meeting by electronic voting system, where the voting was kept open for 24 hours from the circulation of the minutes.

    Now, the period of voting has been extended from the time of circulation of minutes for such time as decided by the committee which cannot be less 24 hours and cannot exceed 7 days.

    In case of request for extension of time made by the creditor, the voting window can be extended up to 24 hours.

    In case where the matter listed for voting has already received requisite majority votes and 1 extension has been given after the receipt of requisite majority vote, the resolution professional will not extend the voting window.

  4. Regulation 31-B relating to “Approval of committee for insolvency resolution process costs” has been inserted according to which the resolution professional will have to place the operational status of the corporate debtor and will have to seek approval for all costs (which are part of the insolvency resolution process) by the committee.

  5. Regulation 36-A talks about “Invitation for expression of interest”. Sub-rule (1) specifies that the resolution professional will publish brief particulars of the invitation for expression of interest in Form G of the Schedule I at the earliest, not later than 60th day from the insolvency commencement date, from interested and eligible prospective resolution applicants to submit resolution plans.

    Through the amendment, “Clarification” has been inserted which says the resolution professional after the approval of the committee can invite a resolution plan for each real estate project or group of projects of the corporate debtor.

  6. Regulation 38 deals with the “Mandatory contents of the resolution plan” and through the amendment some other mandates have been inserted:

    • The committee can consider the requirement of a monitoring committee for the implementation of the resolution plan.

    • In case formation of monitoring committee is considered for implementation of resolution plan, the committee can decide to constitute the same with the resolution professional or propose another insolvency professional, or any other person as its members.

      In case, where the resolution professional is proposed to be part of the monitoring committee, the monthly fee payable to him will not exceed the monthly fee received by him during the corporate insolvency resolution process.

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