IBBI Directs Insolvency Professionals to Share Reports under Section 99 IBC with Debtors and Creditors to Ensure Equal Access

IBBI Directs Insolvency Professionals to Share Reports under Section 99 IBC with Debtors and Creditors to Ensure Equal Access

In a significant move aimed at promoting transparency and fairness in the insolvency resolution process, the Insolvency and Bankruptcy Board of India (IBBI) has issued a circular directing all registered insolvency professionals (IPs) to ensure equal access to reports prepared by resolution professionals (RPs) for both debtors and creditors.

The circular, dated February 12, 2024, highlights the importance of sharing reports prepared under Section 99 of the Insolvency and Bankruptcy Code, 2016 (IBC), with both the debtor and the creditor. Under Chapter III of Part III of the IBC, RPs play a crucial role in evaluating applications filed by debtors and submitting reports to the adjudicating authority recommending the approval or rejection of these applications.

It has come to the attention of the IBBI that, in certain instances, RPs have failed to provide copies of these reports to both debtors and creditors, resulting in unequal access to essential information. This lack of transparency can impede informed decision-making and undermine the integrity of the resolution process.

To address this issue, the IBBI has advised RPs to ensure that copies of reports are shared with both debtors and creditors in all cases, without exception. This measure aims to empower stakeholders by providing them with comprehensive information about the evaluation and recommendations made by the RP, thereby fostering transparency and facilitating informed decision-making.

The directive issued by the IBBI is in exercise of its powers conferred under Section 196 of the IBC, underscoring the regulatory body's commitment to upholding the principles of fairness and transparency in insolvency resolution proceedings.