Insolvency regulator IBBI has come up with slew of proposals to ensure timely resolution and higher realisations in corporate insolvency resolution process (CIRP).
The measures outlined in a new IBBI discussion paper include seeking CoC approval for operational expenses, holding regular CoC meetings (mandatory monthly meeting), holding deliberations on valuation methodology and disclosure of fair value in Information Memorandum.
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Other proposals
The other proposals of Insolvency and Bankruptcy Board of India (IBBI) are providing clarity in the payout to dissenting financial creditors and segregating the distribution of plan value from plan implementation.
Public comments have to be submitted by November 22, IBBI has said.
EXPERTS’ TAKE
Hari Hara Mishra, CEO, ARC Association, said that sharing of valuation in Information Memorandum is a positive move towards transparency and would help attract serious bidders.
Abdullah Qureshi, Associate Partner, IndiaLaw LLP, said the discussion paper issued by IBBI is a welcome move as it displays the commitment of the insolvency regulator to mitigate the practical issues faced during the CIRP period and accordingly reform the CIRP regulations to compliment the objective of the Insolvency and Bankruptcy Code (IBC).
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Anoop Rawat, Partner, Shardul Amarchand Mangaldas & Co, said the IBBI has a good sense of the complications in the insolvency resolution processes. The latest discussion paper is also an attempt to resolve several issues faced in the insolvency resolution processes, he added.
“Some of the suggestions such as pro rata or staggered payment to the dissenting creditors as against payment of entire entitlement prior to any payment to assenting creditors need further deliberation in view of recent supreme court judgments on the timing of payment to dissenting financial creditors,” Rawat added.