Mumbai: The Council of Bankruptcy and Bankruptcy (IBBI) has proposed major changes in the bankruptcy process to bring more discipline and transparency and to overcome the problems that have emerged in the last cases.
IBBI, which regulates both professional bankruptcy and processes, has been seeking public views on the amendment on September 17.
The main development is the introduction of the code of ethics for the Creditors Committee (COC) proposed by the parliamentary stand committee led by Jayant.
Sinha.
Code of Behavior 31 points, among others, requires creditors to reveal conflicts of interest, maintain full confidentiality and do not try to adjust corporate debtor funds to their contributions during the resolution process.
However, it does not mention how violations in the code will be handled.
Some of the proposed amendments are based on court observations in various cases.
Discussion papers seek to instill revisions in bid twice.
This will prevent delays due to multiple revisions, which are seen in some cases.
Also, an unskilled offer has been explicitly prohibited, which will save lenders from awkward situations such as in DHFL resolution.
The COC has been empowered to decide on the period and threshold for an increase in resolution plans first.
“The proposed changes in IBC regulations relating to resolution and liquidation on time and intend to plug in gaps, which affect the schedule and maximization of value.
These steps also aim to bring greater accountability and transparency in the implementation of key stakeholders who drive the process That, “said the Director of the Company’s UV Asset Hara Mishra.
The sales process of ‘Swiss Challenge’, which has worked well, has been proposed as a standard for resolution and liquidation process.
In this process, bidders have the opportunity to improve the highest bid.
After the offer is received, the original bidder has the right to rejection at the best price.
In a separate paper in the liquidation process, the Board has proposed that more power be given to the Stakeholder Consultation Committee.
In addition, the Board plans to ban liquidators from appoint a commission agent in the sale of assets.
The change arose even when the government proposed to change actions by introducing pre-packaging insolvency resolution (Pirp) for small businesses.
“Under this bill, even after PIRP starts, the management or corporate debtor partners maintain control of the company and affairs, except in case of fraud or mismanagement.
This will ensure that management autonomy is maintained, and will, in turn, promotes business to grow in India, “said the legal partner DSK Samir Malik.
It’s not like a process for corporate where promoters are banned in section 29a of action.