The Insolvency and Bankruptcy Board of India (IBBI) on Wednesday issued revised norms to initiate insolvency resolution process, paving way for homebuyers to seek relief as financial creditors and allowing conditional withdrawal of insolvency applications, among other key changes.
The regulator put in place timeframes to be adopted by resolution professionals (RPs) and stipulated that an RP should assess whether a corporate debtor had indeed indulged in fraudulent transactions within a time-line during the resolution process.
The changes to the IBBI (Insolvency Resolution Process for Corporate Persons) regulations were necessitated after the government had issued an ordinance last month amending the Insolvency and Bankruptcy Code (IBC). The changes will provide more clarity on procedural requirements for various classes of creditors, including homebuyers.
“Wherever the corporate debtor has classes of creditors having at least ten creditors in the class, the interim resolution professional shall offer a choice of three insolvency professionals… to act as the authorised representative of creditors in each class.
“… The insolvency professional, who is the choice of the highest number of creditors in the class, shall be appointed as the authorised representative of creditors of the respective class,” an official release said. —FE