Ibbi Amends Regulations on Corporate Resolution and Voluntary Liquidation Process

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The Board of Insolvency and Bankruptcy of India (IBBI) has amended the regulations relating to the process of corporate resolution as well as voluntary winding up.

The Insolvency and Bankruptcy Code (IBC) provides for the appointment of an agent by the contracting authority to represent the financial creditors of a category, such as the beneficiaries in the context of a real estate project, within the Committee of Creditors (CoC).

In this regard, the regulations require the interim resolution practitioner to offer a choice of three insolvency practitioners in the public announcement, and that class creditors choose one of them to act as their authorized representative.

The final amendments provide that the three insolvency practitioners proposed by the interim resolution practitioner “must be from the state or union territory that has the greatest number of creditors in the class according to the records of debtor company,” an official statement said on Friday. .

Further, an authorized representative should only request voting instructions after the minutes of the meeting have been distributed and vote accordingly.

“He must, however, circulate the agenda, and may seek preliminary opinions from the group’s creditors before the meeting, to enable him to participate effectively in the meeting,” the statement said.

Citing the amendment, the statement said that after evaluating all compliant resolution plans in accordance with the evaluation matrix, the CoC should vote on all compliant resolution plans simultaneously.

“The resolution plan, which receives the most votes, but not less than sixty-six percent of the voting rights, will be considered approved,” he added.

Also with regard to the voluntary liquidation process, some changes have been made.

Now, a corporation “may replace the liquidator by appointing another insolvency practitioner as liquidator by resolution of the members or associates, or contributors, as the case may be,” the statement said.

First post: STI

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