Monthly Update on Restructuring and Insolvency | December 2021 – Insolvency / Bankruptcy / Restructuring

0


India: Monthly Update on Restructuring and Insolvency | december 2021

To print this article, simply register or connect to Mondaq.com.

STATUTORY UPDATES

Filing of the list of creditors under clause (ca) of sub-regulation (2) of regulation 13 of the IBBI regulation (Insolvency resolution process for legal persons), 2016

  • The Insolvency and Bankruptcy Board of India (IBBI) in accordance with clause (ca) of sub-regulation (2) of regulation 13 of the IBBI regulation (Insolvency resolution process for legal persons), 2016 (CIRP Regulations), had published a circular dated November 27, 2020 directing insolvency professionals to file the list of creditors and amendments thereto in the format stipulated on the IBBI website.
  • In said format, a special column for ‘Identification No.’ It was mentioned who requested the creditor identification details. In a few cases, sensitive personal information like Aadhar number, PAN card, etc. were met.
  • Therefore, in order to ensure confidentiality and prevent the circulation of confidential information of a particular creditor, the empty IBBI circular of November 24, 2021 published a new format for filing the list of creditors. The new format removes the obligation to mention the “identification number”. while keeping the rest of the content of the previous format.
  • The said circular also directs the insolvency professionals to file the list of creditors of the respective debtor company and its modification, in the revised format, within three days of the preparation of the list or its modification, as the case may be.
  • An amendment similar to another circular dated November 24, 2021 was also introduced in the filing and modification of the list of stakeholders in the process of liquidation of a debtor company. The change was made in accordance with clause (d) of sub-regulation (5) of Regulation 31 of IBBI Regulation (liquidation process), 2016 (Liquidation process regulations) requiring the liquidator to submit the list of stakeholders on the IBBI electronic platform for dissemination on its website.
  • This amendment was made keeping in mind the fundamental right to privacy of every individual.

Guidelines for Insolvency Professionals to Act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation 2)

  • The Insolvency and Bankruptcy Board of India (IBBI) on December 1, 2021 published the “Insolvency Professionals to Act as Provisional Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendations) (Second) Guidelines, 2021” (Guiding lines), in accordance with “Insolvency Professionals to Act as Provisional Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendations), 2021”, which listed certain criteria on the basis of which a bankruptcy professional insolvency can be included in the IP panel and subsequently appointed by the contracting authority.
  • Keeping in mind the basic objective of the IBC of prompt resolution of the debtor company, these guidelines aim to reduce the time required for the appointment of a professional in the debtor. ‘Insolvency as an Interim Resolution Professional, Resolution Professional, Liquidator and Trustee in Bankruptcy in a pending Resolution or Liquidation Process, as the case may be.
  • At the time of the referral / instructions received from the NCLT, the IBBI does not have prior information on the volume, nature and complexity of an insolvency or bankruptcy process and the available resources available to it. an insolvency practitioner. In such a situation, the IBBI is unlikely to add much value by recommending an insolvency practitioner for the process. In addition, the time required for the final appointment of the insolvency practitioner can prove to be a long and tedious process. Therefore, to avoid administrative delays in the appointment of the insolvency practitioner, through these guidelines, the IBBI recommended that a panel of insolvency professionals be constituted for the purposes of Articles 16 (4 ), 34 (6), 97 (4), 98 (3), 125 (4), 146 (3) and 147 (3) of the IBC.
  • For the formation of the Panel, the Guidelines require the mention of the following parameters:
    • The Panel will have a list of IPs by zone based on the headquarters (address as registered with the Board of Directors) of the IP.
    • Each Panel will be valid for 6 months after which a new Panel will replace it.
    • Any panel name may be chosen by the NCLT for the appointment of the IRP, liquidator, RP or BT for the CIRP, liquidation process, insolvency resolution or bankruptcy process regarding debtor companies. and their personal guarantors.
    • The DRT can retrieve any name from the Panel for appointment as RP or BT, for insolvency or bankruptcy resolution proceedings for personal guarantors of social debtors, as the case may be.
  • The eligibility criteria for insolvency professionals to be included in the panel are as follows:
    • There is no disciplinary procedure, whether initiated by the IBBI or the IPA of which he is a member, pending against him.
    • He has not been convicted at any time during the past three years by a competent court.
    • He expresses his interest in being included in the Panel for the relevant period
    • He undertakes to assume the responsibility of IRP, liquidator, RP or BT, as he may be appointed by the AA
    • He holds a Transfer Authorization (AFA), which is valid until the validity of the Panel
  • The aforementioned panel will have a list of insolvency professionals by area. An insolvency practitioner will be included in the panel against the area where their registered office is located (address as registered with the IBBI).
  • In order to select the Insolvency Professionals, the IBBI will invite the Insolvency Professionals to express their interest in “Form A” by sending an email to their email addresses registered with the IBBI and by sending an email to their email addresses registered with the IBBI. hosting the guidelines on the IBBI website. The expression of interest must be received by IBBI in Form A in the manner and by the date specified.
  • Selection within the Panel should be made on the basis of the volume of assignments available to a particular Insolvency Professional. Therefore, the Insolvency Professional with the lowest volume of assignments will receive the highest score and the Insolvency Professional with the highest volume will receive the lowest rating.
  • The participating insolvency practitioner should understand that, in the event that such a professional is selected on the panel, they should not:
    • Withdraw his interest to act as IRP, liquidator, PR or BT, as the case may be
    • Refuse to act as IRP, liquidator, RP or BT, as the case may be, if appointed by the AA
    • Return their registration to the IBBI or their membership or the AFA to their IPA; during the validity of the Panel
  • In addition, the following conditions should be understood by insolvency professionals before submitting their respective expression of interest:
    • An insolvency practitioner on the panel will be appointed administrator, at the sole discretion of the NCLT
    • The submission of an expression of interest in accordance with these guidelines is an unconditional consent of the insolvency practitioner to act as IRP, liquidator, RP or BT, as the case may be.
    • An Insolvency Professional who refuses to act as IRP, Liquidator, RP or BT, after being appointed by the NCLT, will not be included in the panel for the next five years, without prejudice to any further action that may be taken. taken by IBBI

To view the full article, please click here.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR POSTS ON: Insolvency / Bankruptcy / Restructuring in India

Applicability of Insolvency Laws to Personal Guarantors

Lawyers SS Rana & Co.

On May 21, 2021, the Apex Court in Lalit Kumar Jain V. Union of India & Ors recognized and upheld the Rules on Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) 2019, …

Cross Border Insolvency Regime in India

MZM Legal

Usually, a cross-border insolvency situation arises when the debtor has assets or creditors in different jurisdictions or when different insolvency proceedings have been initiated in more than one jurisdiction.


Share.

About Author

Comments are closed.