The Insolvency and Bankruptcy Board of India has proposed amendments to streamline CIRP (Corporate Insolvency Resolution Process) to improve efficiency and cut costs
The Insolvency and Bankruptcy Board of India (IBBI) has suggested amendments to the regulations governing the Corporate Insolvency Resolution Process (CIRP). These changes are largely aimed at improving the efficiency and transparency within the CIRP alongside reducing the costs.
The IBBI has invited stakeholders to provide feedback on these amendments by July 10. These revisions are likely to benefit creditors and other stakeholders involved in the CIRP.
In a recent discussion paper, the Insolvency and Bankruptcy Board of India (IBBI) proposed that instead of having separate valuation reports for different types of assets, a registered valuer should submit a comprehensive valuation report for the entire corporate debtor.
For companies with assets worth up to Rs 1,000 crore and for micro, small, and medium enterprises (MSMEs), the IBBI suggests appointing only one registered valuer to determine both the fair value and liquidation value.
The IBBI stated that, if the Committee of Creditors opts to appoint two valuers, they must document the reasons for this decision before the resolution professional proceeds with the appointments. This will decrease CIRP costs and expedite the process for smaller entities.
To prevent delays in the appointment of authorised representatives (AR) for creditors, the IBBI, also proposed to allow the interim resolution professional to enable the AR to participate in the Committee of Creditors meetings immediately after an application for their appointment is submitted to the adjudicating authority.
The discussion paper also addressed the issue of release of guarantees in the resolution plan, the board proposes that such a proposal submitted by the applicant will not extinguish the rights of creditors to proceed against guarantors and enforce realisation of guarantees governed through various agreements.
(With inputs from PTI)