On December 8, 2023, the Insolvency and Bankruptcy Board of India (IBBI) took a significant step towards enhancing the efficiency of the insolvency resolution process by issuing the “Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2023.” These guidelines aim to expedite the appointment of Insolvency Professionals (IPs) by preparing a panel in advance, mitigating administrative delays.
Key Provisions:
Eligibility Criteria:
To be included in the panel, IPs must meet certain eligibility criteria, ensuring a high standard of professionalism. These criteria include the absence of pending disciplinary proceedings, no convictions in the last three years, submission of expression of interest, and holding a valid Authorization for Assignment (AFA) during the panel’s validity.
Expression of Interest:
The guidelines outline the process for inviting expressions of interest from IPs, emphasizing the unconditional consent of IPs to act as Interim Resolution Professionals, Liquidators, Resolution Professionals, or Bankruptcy Trustees. The deadline for submission is December 25, 2023, and the Board is set to share the panel with the Adjudicating Authority by December 29, 2023.
Panel of IPs:
The IBBI will prepare a common panel of IPs with a validity of six months, categorized by zones based on the registered office of the IP. This panel will be accessible to the Adjudicating Authority, allowing them to choose IPs for various insolvency processes.
Scoring Criteria:
To prioritize experience and competence, IPs will be included in the panel based on the volume of completed assignments. In case of a tie, the registration date with the Board will serve as the differentiating factor, ensuring a fair selection process.
Conditions for IPs:
The guidelines establish conditions for IPs, emphasizing their commitment once included in the panel. IPs are expected not to withdraw their consent without sufficient justification, and any deviation may result in their removal from the panel for six months. The guidelines also discourage surrendering registration or membership during the panel’s validity.
Appointment Process:
The Adjudicating Authority holds discretionary power to appoint IPs from the panel, ensuring flexibility in the selection process. Additionally, the Authority can refer to or direct the Board for appointments, either from or outside the panel, based on specific cases.
Repeal and Savings:
The guidelines issued on June 12, 2023, are repealed, and all actions taken under the previous guidelines are saved. This demonstrates the IBBI’s commitment to continuous improvement and adaptability in response to evolving needs in the insolvency landscape.
