The Insolvency and Bankruptcy Board of India has amended the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 with effect from February 7, 2018, and has brought into force the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2018. The salient features of the new regulations have been discussed hereunder.
Appointment of registered valuers
The resolution professional shall within seven days of his appointment, appoint one registered valuer to determine the fair value and the liquidation value of the corporate debtor. Fair value means the estimated realizable value of the assets of the corporate debtor, if they were to be exchanged on the insolvency commencement date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had acted knowledgeably, prudently and without compulsion. Liquidation value means the estimated realizable value of the assets of the corporate debtor, if the corporate debtor were to be liquidated on the insolvency commencement date.
After the receipt of resolution plans, the resolution professional shall provide the fair value and the liquidation value to every member of the committee of creditors in electronic form, on receiving an undertaking from the member to the effect that such member shall maintain confidentiality of the fair value and the liquidation value.
Invitation of Resolution Plans
The resolution professional shall issue an invitation, including evaluation matrix, to the prospective resolution applicants to submit resolution plans. Evaluation matrix means such parameters to be applied and the manner of applying such parameters, as approved by the committee of creditors, for consideration of resolution plans for its approval. The resolution professional may modify the invitation, the evaluation matrix or both with the approval of the committee.
A resolution plan shall provide for the measures, as may be necessary for insolvency resolution of the corporate debtor for maximization of value of its assets, including but not limited to transfer of all or part of the assets of the corporate debtor to one or more persons, sale of all or part of the assets whether subject to any security interest or not, the substantial acquisition of shares of the corporate debtor, or the merger or consolidation of the corporate debtor with one or more persons, satisfaction or modification of any security interest, obtaining necessary approvals from the Central and State Governments and other authorities.
Submission of Resolution Plan
The resolution professional shall submit the resolution plan approved by the committee of creditors to the Adjudicating Authority, at least fifteen days before the expiry of the maximum period permitted for the completion of the fast track corporate insolvency resolution process, with the certification that the contents of the resolution plan meet all the requirements of applicable laws and that the resolution plan has been approved by the committee of creditors.