Insolvency regulator, IBBI, has come out with a draft of the format of the progress report that liquidators are required to file with the National Company Law Tribunal (NCLT) under the liquidation process. The objective of developing a format of the report is to streamline the liquidation process and ensure uniformity in the structure of such reports.
It would be beneficial for both Insolvency Professionals and the Adjudicating Authority if there were a standardised report, IBBI has said. Public comments have been invited on the draft format through electronic mode by July 12.
Insolvency and Bankruptcy Board of India (IBBI) had in February this year stipulated that the progress reports should also be shared with the members of the Stakeholders Consultation Committee, provided they have given a confidential undertaking.
‘Comprehensive format’
Commenting on the latest IBBI move, Anoop Rawat, Partner, Shardul Amarchand Mangaldas & Co, said, “the progress report format is a comprehensive format covering all important areas of the liquidation process. The format shall also organise the liquidation process activities for the liquidators albeit at the cost of additional time and resource deployment”.
Anjali Jain, Partner at Areness, said that the latest step to streamline the progress reports furnished by the liquidator is highly welcome, as it enhances transparency and provides immense clarity to various stakeholders.
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Currently, IBBI Regulation on liquidation process requires progress report in a liquidation process to include details on the appointment, tenure and cessation of appointment of professionals; the settlement of the list of stakeholders; the status of any property that remains to be sold and realised; distributions made to stakeholders and the distribution of unsold property to stakeholders.
Additionally, the report should cover the fee due to and received by the liquidator, the remuneration or fee paid to professionals appointed by the liquidator, developments in any material litigation involving the corporate debtor and the filing and developments in applications for avoidance of transactions.