1. The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020:

The Insolvency and Bankruptcy Board of India (“IBBI”) vide notification dated 07.08.2020 has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020 (“Amendment Regulations”) to amend the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“Principal Regulation”) as per below:

(i) Amendment in Regulation 4A which provides a choice of an authorized representative for a certain class of creditors:

The Principal Regulations provides an Authorised Representative (“AR”) appointment by the Adjudicating Authority to represent financial creditors in a class, like allottees under a real estate project, in the creditors' committee. For this purpose, the Regulations require the Interim Resolution Professional (“IRP”) to offer a choice of 3 Insolvency Professionals (“IP”) in the public announcement, and the creditors in a class to choose one of them to act as their authorized representative.

Now, a new clause (aa) has been inserted after clause (a) in Regulation 4A(2) vide this Amendment Regulation, which provides that the 3 IPs offered by the IRP must be from the State or Union Territory, which has the highest number of creditors in the class as per records of the corporate debtor. This will facilitate ease of coordination and communication between the AR and the creditors in the style he represents.

(ii) Amendment in Regulation 16A(9) relating to voting instructions from creditors in a class by an authorized representative:

As per Principal Regulations, the authorized representative shall seek voting instructions from creditors in a class at two stages, namely, (i) before the meeting; and (ii) after the circulation of minutes of the meeting.

Now, the Amendment Regulation provides that the authorized representative shall seek voting instructions only after circulation of minutes of meeting and vote accordingly. He shall, however, circulate the agenda and may seek preliminary views of creditors in the class before the meeting, to enable him to participate in the meeting effectively.

(iii) Amendment in Regulation 39, which provides a process for approval of resolution plan:

As per Principal Regulations, the Committee of Creditors (“CoC”) shall evaluate all compliant resolution plans per the evaluation matrix to identify the best of them and approve it.

Now, the Amendment Regulation provides that after evaluating all compliant resolution plans as per the evaluation matrix, the CoC shall simultaneously vote on all compliant resolution plans. The resolution plan, which receives the highest votes, but not less than 66% of voting share, shall be considered approved. Further, in the case where two or more resolution plans receive equal votes, but not less than requisite votes, then the CoC shall approve any one of them, as per the tie-breaker formula announced before voting. However, if there is a case where none of the resolution plans receives requisite votes, then the CoC shall again vote on the resolution plan that received the highest votes, subject to the timelines under the I&B Code.

  1. Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2020:

The Insolvency and Bankruptcy Board of India (“IBBI”) vide notification dated 05.08.2020 has notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2020 (“Amendment Regulations”) to amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Principal Regulation”) in the following manner:

(i) Insertion of Clarification after the Table under Regulation 4(2)(b) which provides provisions relating to Liquidator's fee:

As per extant regulations, in the liquidation process, the fee payable to the Liquidator has to be fixed by the Committee of Creditors (CoC). Further, if the fee has not been fixed by the CoC, then the Liquidator's fee has to be fixed as a percentage of the amount realized and the amount distributed by the Liquidator. However, there have been instances where a liquidator realizes the amount while another liquidator distributes the same to stakeholders. Accordingly, the newly inserted Clarification provides that where a liquidator realizes any amount but does not distribute the same, he shall be entitled to a fee corresponding to the amount realized. Similarly, where a liquidator distributes any amount, which is not realized by him, he shall be entitled to a fee corresponding to the amount distributed by him.

(ii) Amendment in the table of Model timeline for the liquidation process.

The Amendment Regulation provides amendment in the Model timeline for the liquidation process provided under Regulation 47 of the Principal regulation. Now, the amendment provides that in serial number 4, in column 2, for “Section 38 (1) and (5), Reg. 17, 18 and 21A”, the following shall be substituted, namely: - “Section 38 (1), Reg. 17, 18, 19, 20 and 21A”. Accordingly, the timeline for withdrawal/modification of claim by a creditor under section 38(5) of the I&B Code has been deleted from serial number 4. The same has already been given in serial number 5. Further, in the serial number 4, the timelines of 30 days for Regulation 19 (Claims by workers and employees) and Regulation 20 Claims by other stakeholders) has also been inserted in the Amendment Regulation. In addition, the Amendment Regulation also provides that in serial number 18, in column 4, for the word “disclosure,” the word “disclaimer” shall be substituted. Accordingly, the notice to persons interested in the onerous property or contract may be given at least seven days before making an application to the Adjudicating Authority for disclaimer.

  1. The Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020:

The Insolvency and Bankruptcy Board of India (“IBBI”) vide notification dated 05.08.2020 has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020 to amend the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 by substituting Regulation 5 which provides provisions relating to the appointment of Liquidator. The amended regulation 5 provides that the corporate person may replace the Liquidator by appointing another insolvency professional as Liquidator by a resolution of members or partners, or contributories, as the case may be.

  1. Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2020

The Insolvency and Bankruptcy Board of India (“IBBI”) vide notification dated 30.06.2020, introduced an amendment in Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (“Regulations”) wherein in Regulation 12 “Recognition of Insolvency Professional Entities” sub-regulation (1), clause (a) has been substituted to read as

“12 (1) A company, a registered partnership firm or a limited liability partnership may be recognized as a professional insolvency entity, if –

(a) its sole objective is to provide support services to insolvency professionals”.

Before the amendment, the clause read as “its sole objective is to provide support services to insolvency professionals, who are partners or directors, as the case may be.”

Hence, now Insolvency Professional Entities (“IPEs”) can provide support services to not only their directors or partners but also to any other IPs as well, thus expanding their area of operation and role of the IPEs.

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