IBBI issues amendments to the Insolvency Resolution Process for Corporate Persons Regulations, 2016

IBBI issues amendments to the Insolvency Resolution Process for Corporate Persons Regulations, 2016

The Insolvency and Bankruptcy Board of India, vide notification dated 16 September 2022, issued regulations to further amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("principal regulations").

In exercise of powers conferred under Section 196 (1)(t) read with section 240 of the Insolvency and Bankruptcy Code, 2016, the amended regulations may be called the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2022.

The following amendments have been made in the principal regulations:

1. Regulation "4C. Process e-mail" shall be inserted, namely,

(1)The interim resolution professional shall open an email account and use it for all correspondences with stakeholders and in the event of his replacement by a resolution professional, shall handover the credentials of the email to him.

(2)The resolution professional shall, in case of his replacement with another resolution professional or a liquidator, hand over the credentials of the email to the other resolution professional or the liquidator, as the case may be."

2. Regulation "6A. Communication to creditors" shall be inserted, namely,

The interim resolution professional shall send a communication along with a copy of public announcement made under regulation 6, to all the creditors as per the last available books of accounts of the corporate debtor through post or electronic means wherever the information for communication is available.

Provided that where it is not possible to send a communication to creditors, the public announcement made under regulation 6 shall be deemed to be the communicated to such creditors.

3. Under Regulation 18, after sub-regulation (2) of the principal regulations, the following explanation shall be inserted, namely

"Explanation: For the purposes of sub- regulation (2) it is clarified that meeting (s) may be convened under this sub-regulation till the resolution plan is approved under sub-section (1) of section 31 or order for liquidation is passed under section 33 and decide on matters which do not affect the resolution plan submitted before the Adjudicating Authority."

4. Regulation 35A, for sub-regulation (3) of the principal regulations, the following shall be substituted, namely:

"(3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the Adjudicating Authority for appropriate relief on or before the one hundred and thirtieth day of the insolvency commencement date."

5. Regulation 35A, after sub-regulation (3) of the principal regulations, the following shall be inserted, namely:

"(3A) The 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."

6. Regulation 36A, in sub-regulation (1), for the words "not later than seventy fifth day", the words "not later than sixtieth day" shall be substituted.

7. After Regulation 36B of the principal regulations, the following shall be inserted, namely:-

"36C. Strategy for marketing of assets of the corporate debtor.

(1) The resolution professional shall prepare a strategy for marketing of the assets of the corporate debtor in consultation with the committee, where the total assets as per the last available financial statements exceed one hundred crore rupees and may prepare such strategy in other cases.

(2) Decision of implementing such strategy along with its cost shall be subject to the approval of the committee.

(3) The member(s) of committee may also take measures for marketing of the assets of the corporate debtor."

8. Regulation "39BA. Assessment of Compromise or Arrangement" shall be inserted, namely:

(1) While deciding to liquidate the corporate debtor under section 33, the committee shall examine whether to explore compromise or arrangement as referred to under sub -regulation (1) of regulation 2B of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016 and the resolution professional shall submit the committee‟s recommendation to the Adjudicating Authority while filing application under section 33.

(2) Where a recommendation has been made under sub-regulation (1), the resolution professional and the committee shall keep exploring the possibility of compromise or arrangement during the period the application to liquidate the corporate debtor is pending before the Adjudicating Authority."

9. Regulation "40D. Decision for liquidation" shall be inserted, namely,

(1) The committee while considering the liquidation of the corporate debtor 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 or factors 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.

(2) Such consideration may be recorded and submitted in the application for liquidation submitted by the resolution professional to the Adjudicating Authority."

The amended regulations shall come into force on the date of publication in the Official Gazette.