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Cabinet approves Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019

Newsmantra — Thu, 12 Dec 2019 06:50:06 +0000

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today approved the proposal to make amendments in the Insolvency and Bankruptcy Code, 2016 (code), through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease doing of business.

Details of the Proposal:

The Amendment Bill seeks to amend sections 5(12), 5(15), 7, 11, 14, 16(1), 21(2), 23(1), 29A, 227, 239, 240 and insert new section 32A in the Insolvency and Bankruptcy Code, 2016 (Code).

Impact:

1. Amendments to the Code to remove bottlenecks, streamline the CIRP and protection of last mile funding will boost investment in financially distressed sectors.

2. Additional thresholds introduced for Financial Creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP).

3. Ensuring that the substratum of the business of corporate debtor is not lost, and it can continue as a going concern by clarifying that the licenses, permits, concessions, clearances etc. cannot be terminated or suspended or not renewed during the moratorium period.

4. Ring-fencing corporate debtor resolved under the IBC in favour of a successful resolution applicant from criminal proceedings against offences committed by previous management/promoters.

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IBBI Amends The Insolvency And Bankruptcy Regulations

Newsmantra — Fri, 29 Nov 2019 06:19:54 +0000

The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2019 on 28th November 2019. Some of the amendments made by these Regulations are consequential to the Insolvency and Bankruptcy Code (Amendment) Act, 2019, which came into force on 5th August, 2019.

The Insolvency and Bankruptcy Code, 2016 (Code) envisages corporate insolvency resolution process (CIRP) for reorganisation and insolvency resolution of corporate debtors. An insolvency professional conducts the CIRP and manages its operations during the CIRP.

Keeping in view the responsibilities of the IPs and the importance of CIRP, the Code casts an obligation on the IBBI and the IPA to watch performance of IPs, and to collect, support and pass information and records on insolvency process of corporate debtors. It also casts an obligation on IPs to send/give certain information and records relating to CIRP to the IPA and IBBI.

In the interest of transparency and accountability in conduct of CIRPs and conduct of the IPs, and to help the IBBI, the IPAs and the IPs to discharge of their statutory obligations, the Amendment Regulations need the IPs to file a set of Forms, covering the life cycle of a CIRP, online on an electronic platform hosted on the website of the IBBI. An IP shall be liable to action permissible under the Code, including refusal to issue or renew Authorisation for Assignment, for failure to file a Form or for inaccurate or delayed filing

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