IBBI proposes amendments to norms to streamline corporate resolution process

livemint.com:

corporate resolution process and prevent delay in implementation of the resolution plan, the Insolvency and Bankruptcy Board of India (IBBI) on Wednesday proposed amendments to some regulations. The insolvency and bankruptcy board has proposed to structure the corporate resolution plan into two parts -- inflow of funds and distribution to various stakeholders -- under the Insolvency and Bankruptcy Code (IBC).

Amendments have been proposed to seven areas, that include approval of committee of creditors (CoC) for insolvency resolution process cost, monthly CoC meetings, discussion of valuation methodology and report with the CoC, and disclosure of the valuation reports. According to an IBBI discussion paper, other areas include continuation of process activities, pending disposal of extension application by the Adjudicating Authority (AA), clarity in minimum entitlement to dissenting financial creditors and mandatory contents of resolution plan.

“Part A of the resolution plan shall deal with the inflow i.e. payment under the resolution plan (total value of the resolution plan), payment of insolvency resolution process cost, payment schedule, feasibility and viability of the resolution plan, etc, while Part B will deal with distribution to various stakeholders," the discussion paper said.

Structuring the resolution plan into two parts will enable the AA to first approve the resolution plan effectuating control by the resolution applicant so that inflow can take place and the corporate debtor (CD) may start functioning again, the discussion paper also said. “The second part shall deal with distribution amongst the various stakeholders.