Sr.no Old Provisions New Amendments Implications/Remark
IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2018
Effective Date: 1st April 2018
1. Regulation 3 (Eligibility for resolution professional)
3(1)…(c ) is not an employee or proprietor or a partner(i)  of a firm of auditors or company secretaries in practice or cost auditors of the corporate debtor; or
For the words “company secretaries”, the words “secretarial auditors” shall be substituted. Company secretaries who are  not amongst the secretarial auditors of the company will be eligible to be RP
2. Regulation 33: Costs of the interim resolution professional

 

Explanation:

For the purposes of this Regulation, “expensesmean the fee to be paid to the interim resolution professional and other expenses, including the cost of engaging professional advisors, to be incurred by the interim resolution professional.

The following Explanation shall be substituted

For the purposes of this regulation, “expenses” include the fee to be paid to the interim resolution professional, fee to be paid to insolvency professional entity, if any, and fee to be paid to professionals, if any, and other expenses to be incurred by the IRP.

 The regulations provide that the expenses to be incurred on or by the IRP/RP shall be fixed / ratified by the COC, expenses includes now fees to be paid to IP entity which was not mentioned earlier.
3. Regulation 34: Resolution professional cost

Explanation:

Same as Regulation 33

Same as amendment to Regulation 33
4. New Regulation:

34A. Disclosure of Costs. –

The IRP or the RP, as the case may be, shall disclose item wise insolvency resolution process costs in such manner as may be required by the Board.”.

Instead of providing a single amount as a Resolution process cost, bifurcation is to be provided.

No format is provided by the board yet for reporting of it.

5. New Regulation:

Reg. 35A:  Identification of Resolution Applicant

The resolution professional shall identify the prospective resolution applicants on or before the 105th day from the Insolvency commencement date.”.

The amendments now require the RP to identify the prospective resolution applicants on or before the 105th day from the insolvency commencement date.

Currently, there is no deadline.

6. Form A: Public Announcement

Sr.8. & Sr.9 (Details of IRP and last date of claim)

 

 

 

New Entries:

Sr.8: Name And Registration Number of the IP acting as IRP

Sr.9: Address and e-mail of The IRP, as Registered with the Board

Sr.10: Address and E-Mail to be used for Correspondence with the IRP, If different from those given at Sl. No. 9.

Sr.11: Last date for submission of claims

If IRP is using e-mail and address for correspondence other than as registered with board then same will be clearly visible in the public announcement.

This amendment is for operational simplicity of the board.

7. Form B: Proof of claim by operational creditors except workmen and employees

Form C: Proof of claim by financial creditors

Form D: Proof of claim by a workman or an employee

Form E: Proof of claim submitted by authorised representative of workmen and employees

Form F: Proof of claim by creditors (other than financial creditors and operational creditors)

New Provision:

  1. Along with the Form only “declaration” needs to be given instead of “affidavit
  2. In Form C: for the words “Operational Creditor”, the words “Financial Creditor” shall be substituted
  3. In Form C: A financial creditor submitting a claim to the IRP “shall declare whether it is or is not a related party in relation to the corporate debtor.
  4. For all forms other than Form D & E: In the case of company or LLP, the declaration and verification shall be made by the director/manager/secretary and in the case of other entities, an officer authorised for the purpose by the entity.
  5. For Form D & E: Declaration and Verification by claimant

Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2018

Effective Date: 01/04/2018

8. Regulation 2: Definitions

 

 

New Regulation: 2(1) (ea)

(ea): “liquidation cost” under sub-section (16) of section 5 means-

(a) fee payable to the liquidator under regulation 4;

(b) remuneration payable by the liquidator under regulation 7;

(c) cost incurred by the liquidator under regulation 24; and

(d) interest on interim finance for a period of twelve months or for the period from the liquidation commencement date till repayment of interim finance, whichever is lower.

Earlier liquidation cost was not defined in the regulation.

Only interest portion on interim finance cost raised is to be considered under liquidation cost.

9 Regulation 3: Eligibility for appointment as liquidator

3 (c ) (i): for the words ‘company secretaries’

words ‘secretarial auditors’ shall be substituted. Similar changes in line of eligibility of IRP and RP
10. Regulation 32:  Manner of Sale

1.       Sell an asset on a standalone basis

2.       Asset in a slump sale

3.       Set of assets collectively

4.       Assets in parcels

after clause (b), the following clause shall be inserted, namely

( c ) sell the corporate debtor as a going concern

Earlier regulations allow a liquidator to sell an asset on a standalone basis, now allow the liquidator to sell the corporate debtor as a going concern. This will helps in getting more liquidation value then selling asset on standalone basis. Further, it will also help protect the interests of employees in viable units and help reduce the time period for liquidation

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