IBBI Discussion Paper

Discussion Paper on issues related to Real Estate – IBBI dated 07.11.2024

The proposals outlined in this discussion paper cover a range of critical areas, including:

1. Proposed Inclusion of Land Authorities in Committee of Creditors (CoC) Meetings

2. Handling Cancelled Land Allotments in Real Estate Insolvency Cases

3. Empower CoC to Facilitate Participation of Associations of Allottees as Resolution Applicants

4. Clarification about inclusion of Interest in Homebuyers’ Claims in CIRP

5. Representation of large numbers of creditors through facilitators

6. Proposal to disseminate Committee of Creditors (CoC) minutes of the meeting to all creditors in class of real estate projects

7. Streamlining Possession Handover in Real Estate Projects

Discussion Paper on issues related to Real Estate – IBBI dated 07.11.2024 Read Post »

Discussion paper on Mediation by the operational creditors before approaching Adjudicating Authority for filing Section 9 application

There are several recurring issues in Section 9 applications, particularly disputes between OC and Corporate Debtor (CD). Common issues include (i) Disagreements on Goods/Services regarding the quality or performance of goods and services provided (ii) Contractual Disputes having allegations of non-compliance with contractual terms by either party (iii) Discrepancies over the exact amount owed or alleged underpayment (iv) Claims of the CDs against the OC for set-offs or damages. These issues are time consuming and eventually unnecessarily burden the limited judicial capacity.

In order to resolve disputes between the OC and corporate debtor at the earliest stage, and facilitate faster admission by AA, mediation as an option may be considered as an effective tool. The operational creditor can undergo mediation with the aid of mediator, as provided under the Mediation Act, 2023 In case of failure of mediation settlement, the mediator will prepare a non-settlement report which shall be annexed with the application for initiation of CIRP before the AA. The proposal aims to reduce the burden on the AA and thereby expediting admissions.

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Discussion Paper on MSME Registration and Disclosure Framework under CIRP

It is proposed to amend Regulation 36 of the CIRP Regulations for making disclosures about the status of the corporate debtor, being registered or not, as a micro, small or medium enterprise in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006.

Furthermore, in case, available documents with the RP, indicates CD falls within the category of MSME, in that event, he may get the Udyam Registration Certificate generated, on case-to-case basis before making such disclosure in the IM.

The proposed amendment is expected to reduce information asymmetry in the resolution process for MSMEs. It may encourage greater participation from potential resolution applicants who may have otherwise been uncertain about their eligibility. Certain resolution applicants specifically look for MSMEs due to their unique nature and advantages, such as simplified compliance requirements and government incentives. This may lead to enhanced participation and thereby lead to improved outcomes in terms of value maximization.

Discussion Paper on MSME Registration and Disclosure Framework under CIRP Read Post »

Concept of only one Registered Valuer and Resolution Plan shall not extinguish the Rights of the Creditors to proceed against Guarantors – Amendment in CIRP Regulations (Discussion Paper dated 19.06.2024)

IBBI Discussion paper on amendments to CIRP Regulations, 2016 19th June, 2024 IBBI issues discussion paper on amendments to Insolvency

Concept of only one Registered Valuer and Resolution Plan shall not extinguish the Rights of the Creditors to proceed against Guarantors – Amendment in CIRP Regulations (Discussion Paper dated 19.06.2024) Read Post »

New CIRP Forms and monthly filing under Insolvency Code with Easy compliance for Insolvency Professional (IPs)- IBBI

On IBBI’s behest, the IIPICAI constituted a Study Group on ‘Removing Duplicity and Redundancy in Compliances by IPs’, comprising of 10 members from all three IPAs. The Study Group was mandated to make recommendations to alleviate the compliance burden faced by IPs. The Study Group submitted its draft report to IBBI recently.

New CIRP Forms and monthly filing under Insolvency Code with Easy compliance for Insolvency Professional (IPs)- IBBI Read Post »

Discussion paper on “Strengthening the process of issuance of record of default by Information Utility”

As per provisions of the Code, the admission process should ordinarily be completed in 14 days from the date of filing application. However, there are significant delays in admission of applications and one of the reasons is lack of availability of credible and reliable information about debt and default. Accordingly, strengthening the process of issuance of Record of Default (RoD) by IU can help in significant reduction of delays and fast track the admission process. In this regard the following are proposed:

Issue 1: Providing sufficient time to the debtor to respond after delivery of the information of default by the IU.
Issue 2: Delivery of information of default on debtor provided e-mail id for authentication in case of certain category of creditors.
Issue 3: Submission of documents by creditors showing proof for debt/security, default and latest acknowledgement of debt.
Issue 4: Proper due diligence by IU before issuance of RoD:
Issue 5: Issuance of RoD in case Debtor disputes the information of default.
Issue 6: Incorporating additional details in Form – D (Record of Default).

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Discussion Paper on Real-Estate Related Proposals- CIRP & Liquidation

1. The discussion paper deals with the following issues being faced in insolvency processes of real-estate projects:

A. Mandatory registration and extension of projects under Real Estate Regulatory Authority (RERA);

B. Operating a separate bank account for each real estate project;

C. Execution of registration/sublease deeds with approval of committee of the creditors (CoC) during corporate insolvency resolution process (CIRP);

D. CoC to examine and invite separate plans for each project; and

E. Exclusion of property in possession of homebuyers from the liquidation estate.

2. Implementation of Amitabh Kant’s Committee Report on Real-Estate projects.

3. The Colloquium on Functioning and Strengthening of the IBC Ecosystem.

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Discussion Paper on Rationalisation of the Regulatory Framework for Enhancing the Effectiveness of Insolvency Professional Entities in Insolvency Resolution Process

This paper covers the following issues: – 1) Monitoring of IPE acting as IP
2) Related Party Definition for an IPE acting as IP
3) Restriction on Number of Assignments by an IP
4) Minimum Fee Structure of an IPE acting as IP

Discussion Paper on Rationalisation of the Regulatory Framework for Enhancing the Effectiveness of Insolvency Professional Entities in Insolvency Resolution Process Read Post »

Discussion Paper on ‘Strengthening the Liquidation Process’

To respond to emerging needs, the regulatory framework of the liquidation process has been
amended on several occasions. With the emergence of new issues, as detailed in this paper, a
need is felt to further strengthen the regulatory framework of the liquidation process in terms
of certain matters related to sale, accountability of liquidator towards stakeholders, etc as
detailed below:
1. Review of Auction Framework 2. Reduction in reserve price 3. Monitoring Private Sale 4. Listing of all assets on listing platform 5. Circulation of progress reports to stakeholders 6. Simplification of calculation of liquidator’s fee 7. Meetings of SCC at regular intervals 8. Preliminary Report 9. Liquidation Cost 10. Valuation related 11. Litigation related 12. Running business of the CD as Going Concern 13. Form H – Compliance Certificate 14. Assignment of Not Readily Realisable Assets (NRRA) 15. Early Dissolution 16. Withdrawal from Corporate Liquidation Account

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