The Insolvency and Bankruptcy Board of Indian on 27th June 2022, has released the discussion paper on changes in the corporate insolvency resolution process (CIRP) to reduce delays and improve the resolution value.
Regulation 40A of the CIRP Regulations provides the timelines for activities in a CIRP. At present, timelines are seemingly presented in a linear manner creating a false impression that the activities are to be performed in a sequential manner.
The proposed amendment to CIRP Regulation shall be as follows:
- As per regulation 35A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 the present timeline of filing avoidance application is 135 days from the date of commencement which coincides the timeline for submission of resolution plan which is now being proposed to decrease the time for filing of avoidance application to 130 days.
- Regultion 36(1), directs the Resolution Professional (RP) to submit the Information Memorandum (IM) to the Committee of Creditors (CoC) within 95 days from the date of commencement so that sufficient time is available to the RP within the overall timeline.
- Further as per the prosed changes in regulation 36A, the Expression of Interest (EoI) shall be invited within 75 days of the commencement of the CIPR proceedings.
- A new regulation 36C which deals with Strategy for marketing of assets of the corporate debtor has been proposed. The resolution professional shall prepare a strategy for marketing of the assets of the corporate debtor, where the total claims exceed Rs.100 crore. Such strategy shall consist the measures that would be taken and the cost involved in implementation and shall be prepared in consultation with the committee.
The creditors may propose and include measures that they would take in the marketing of assets of the corporate debtor as part of the strategy.
