IBBI Proposes Rule Changes for Insolvency Resolution Process
Real Estate

IBBI Proposes Rule Changes for Insolvency Resolution Process

The Insolvency and Bankruptcy Board of India (IBBI) has recently proposed changes to the rules governing the insolvency resolution process. These proposed changes aim to streamline and improve the effectiveness of the existing framework.

One of the key changes proposed by the IBBI is the introduction of a pre-packaged insolvency resolution process. This process allows for the resolution of distressed companies outside the traditional insolvency framework, providing a faster and more cost-effective resolution for all stakeholders involved. The proposal suggests that pre-packaged resolution plans can be submitted directly to the adjudicating authority, reducing the time and effort required for resolution.

Another proposed change is the enhancement of the role played by the resolution professionals (RPs) in the resolution process. The IBBI suggests that RPs should have the power to monitor the progress of the resolution plan and take necessary actions to ensure compliance. These proposed changes aim to strengthen the role of RPs and improve the efficiency of the resolution process.

The IBBI also proposes changes to the committee of creditors (CoC) and the voting thresholds required for the approval of a resolution plan. The proposal suggests that the CoC should have the authority to determine the order of preference in the distribution of proceeds, providing more flexibility and transparency in the resolution process. Additionally, the IBBI proposes to lower the voting threshold required for the approval of a resolution plan, making it easier for plans to be accepted.

In an effort to increase transparency and accountability, the IBBI also proposes changes to the reporting requirements for resolution professionals. The proposal suggests that RPs should submit a detailed report to the IBBI at various stages of the resolution process, providing greater visibility into the progress made and the strategies employed.

These proposed changes by the IBBI aim to address some of the challenges faced by the current insolvency resolution process, including delays and conflicts of interest. If implemented, these changes have the potential to significantly improve the efficiency and effectiveness of the process, benefiting all stakeholders involved.

It is important to note that these proposed changes are still subject to public comments and feedback. The IBBI is open to suggestions and is expected to take into account all viewpoints before finalizing the amended rules.

The Insolvency and Bankruptcy Board of India (IBBI) has recently proposed changes to the rules governing the insolvency resolution process. These proposed changes aim to streamline and improve the effectiveness of the existing framework. One of the key changes proposed by the IBBI is the introduction of a pre-packaged insolvency resolution process. This process allows for the resolution of distressed companies outside the traditional insolvency framework, providing a faster and more cost-effective resolution for all stakeholders involved. The proposal suggests that pre-packaged resolution plans can be submitted directly to the adjudicating authority, reducing the time and effort required for resolution. Another proposed change is the enhancement of the role played by the resolution professionals (RPs) in the resolution process. The IBBI suggests that RPs should have the power to monitor the progress of the resolution plan and take necessary actions to ensure compliance. These proposed changes aim to strengthen the role of RPs and improve the efficiency of the resolution process. The IBBI also proposes changes to the committee of creditors (CoC) and the voting thresholds required for the approval of a resolution plan. The proposal suggests that the CoC should have the authority to determine the order of preference in the distribution of proceeds, providing more flexibility and transparency in the resolution process. Additionally, the IBBI proposes to lower the voting threshold required for the approval of a resolution plan, making it easier for plans to be accepted. In an effort to increase transparency and accountability, the IBBI also proposes changes to the reporting requirements for resolution professionals. The proposal suggests that RPs should submit a detailed report to the IBBI at various stages of the resolution process, providing greater visibility into the progress made and the strategies employed. These proposed changes by the IBBI aim to address some of the challenges faced by the current insolvency resolution process, including delays and conflicts of interest. If implemented, these changes have the potential to significantly improve the efficiency and effectiveness of the process, benefiting all stakeholders involved. It is important to note that these proposed changes are still subject to public comments and feedback. The IBBI is open to suggestions and is expected to take into account all viewpoints before finalizing the amended rules.

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