NEW DELHI :The bankruptcy regulator has amended the rules to speed up debt resolution of companies by reducing litigation and giving greater clarity on the obligations of parties involved in the process.
The Insolvency and Bankruptcy Board of India (IBBI) also strengthened the role of professionals administering bankrupt businesses by codifying the process by which the records of a company’s assets can be taken over from any person, not just promoters and managers.
The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023, which is effective from Monday also says that the bankruptcy resolution professional can approach a tribunal if the persons do not hand over such records.
The move seeks to make bankruptcy resolution more fool- proof by curtailing the scope of litigation and making the process smooth, said experts.
Yogendra Aldak, partner at law firm Lakshmikumaran & Sridharan Attorneys, said the amendments prescribe the manner in which an application for initiation of corporate debt resolution process is to be made.
Every minute detail pertaining to the debt including the date of default and acknowledgment of debt has to be necessarily provided.
Besides, to address delays in submission of claims by creditors, the amendment has confined the time-period for submission of claims to either before the date of issuance of request for a resolution plan or 90 days from the insolvency commencement date, whichever is earlier.
