IBBI amends the corporate resolution regulations and voluntary liquidation process

Team SoOLEGAL 11 Aug 2020 4:18pm

IBBI amends the corporate resolution regulations and voluntary liquidation process

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) has amended regulations concerning the resolution process for corporate persons and the voluntary liquidation process. In compliance with the Insolvency and Bankruptcy Code (IBC), the Adjudicating Authority (AA) has appointed authorized representative to the committee of Creditors (CoC) to represent financial creditors in a class.

IBBI enables a corporate entity to initiate a voluntary liquidation process if it has no debt or is in a position to pay its debts in full from the proceeds of the assets. A corporate person now "may replace the liquidator by appointing another insolvency professional as liquidator by a resolution of members or partners, or contributories, as the case may be", the release said.

The IBC Regulations require an interim resolution professional to give the choice of three insolvency professionals in the public announcement, and the creditors in the class to choose one of them to act as their authorized representative. But, the amendments specify that the three insolvency professionals "must come from the State or the Union Territory, which has the highest number of creditors in the class as per the record of the corporate debtor."

In addition, the authorized representative should seek the instructions for voting only after the circulation of the minutes of the meeting and vote accordingly. “The resolution plan, which receives the highest votes, but not less than sixty-six percent of voting share, shall be considered as approved," the release added. Once all compliant resolution plans have been evaluated in accordance with the evaluation matrix, the CoC should vote on all compliant resolution plans at the same time.

Tagged: IBBI   Insolvency and Bankruptcy   voluntary liquidation process   IBC Regulations  
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