In a bid to reduce delays and achieve better value, the Board of Insolvency and Bankruptcy of India (IBBI) has notified the IBBI (Winding Up Process) (Second Amendment) Regulations 2022 (Winding Up Regulations) Amendment) and IBBI (Voluntary Winding Up Process) (Second Amendment) Regulations 2022 (Amendment to Voluntary Winding Up Regulations).
These were notified on September 16, official sources said.
The amendments would ensure better stakeholder engagement and streamline the liquidation process to reduce delays, they added.
After the amendments, the Creditors’ Committee (CoC) constituted during the Corporate Insolvency Resolution Process (CIRP) would operate as a Stakeholder Consultation Committee (SCC) for the first 60 days.
After the claims are adjudicated and within 60 days of the initiation of the process, CSC will be reconstituted on the basis of the admitted claims.
In addition, in accordance with the amendments, the liquidator has been mandated to organize the meetings of the CCN in a structured manner and within specific deadlines with better participation of the stakeholders.
The scope of the liquidator’s mandatory consultation with SCC has been expanded. From now on, SCC can even propose the replacement of the liquidator to the Adjudicating Authority (AA) and fix the fees of the liquidator, in case the CoC would not have fixed it during the CIRP.
If a claim is not filed during the liquidation process, the amount of the claim collected during the CIRP will be verified by the liquidator.
Whenever the CoC decides that the compromise or arrangement process can be explored during the liquidation process, the liquidator must file a request only in these cases before the contracting authority, to examine the compromise or arrangement proposal. , where applicable, within thirty days of the liquidation order.
Additionally, specific event-based timelines have been stipulated for the auction process. In addition, before the filing of a request for dissolution or closure of the procedure, the SCC advises the liquidator of the manner in which the procedure in terms of cancellation operations or fraudulent or illicit operations will be continued after the closure of the liquidation procedure.
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