The Insolvency and Bankruptcy Board of India on 13th September 2022, published the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2022, through which it has notified a new regulation dealing with fee to be paid to interim resolution professional and resolution professional.
The fee of the interim resolution professional or the resolution professional, appointed on or after 1 st October 2022, shall not be less than 1lakh for the period specified Less than or equal to 165 days and it varies based on the Quantum of Claims Admitted and the time period from insolvency commencement date.
Provided that the applicant or the committee may decide to fix higher amount of fee for the reasons to be recorded, taking into consideration market factors such as size and scale of business operations of corporate debtor, business sector in which corporate debtor operates, level of operating economic activity of corporate debtor and complexity related to process.
For the resolution plan approved by the committee on or after 1st October 2022, the committee may decide, in its discretion, to pay performance-linked incentive fee, not exceeding five crore rupees or may extend any other performance linked incentive structure as it deems necessary.
The fee under this regulation may be paid from the funds, available with the corporate debtor, contributed by the applicant or members of the committee and/or raised by way of interim finance and shall be included in the insolvency resolution process cost.
The performance-linked incentive fee for value maximisation may be paid to the resolution professional at the rate of one per cent of the amount by which the realisable value is higher than the liquidation value, after approval of the resolution plan by Adjudicating Authority on commencement of payment to creditors by the resolution applicant.
