The Insolvency and Bankruptcy Board of India (IBBI) on November 01, 2023, issued a notification regarding a discussion paper on amendments to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Process) Regulations, 2016.
The following amendments are proposed: -
•In view of the foregoing discussion, the following is proposed: To provide clarity with regard to entitlement of dissenting financial creditors, which shall be lower of the: Page 6 of 13 (i) amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53; or (ii) the liquidation value as defined under these regulations been distributed in accordance with the order of priority in sub-section (1) of section 53.
Further, regulation 38(1) may be amended to provide that the financial creditors, who have a right to vote under sub-section (2) of section 21 and did not vote in favour of the resolution plan, shall be paid ‘amount due in the event of liquidation’ in priority over financial creditors who voted in favour of the plan.
Further, an illustration may be added to clarify the extent of priority.
•It is proposed the insolvency professional (IP) should seek approval of all components of the insolvency resolution process cost, including the expenditure incurred for ongoing operations of the CD.
•To review the work/progress of the CIRP by CoC, RP is mandated to conduct the meetings of the CoC every month.
•It is proposed that before finalization of the valuation report, valuers shall explain the valuation methodology to the members of the committee in a meeting facilitated by the RP.
The detailed notification is given in the document attached below.
