PGB Regulation 3 of IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 – Eligibility of bankruptcy trustee

The Insolvency and Bankruptcy Code, 2016 IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 Chapter […]

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The Insolvency and Bankruptcy Code, 2016

IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019

Chapter II – Bankruptcy Trustee

Regulation 3: Eligibility of bankruptcy trustee.

3. (1) An insolvency professional shall be eligible to be appointed as a bankruptcy trustee for a bankruptcy process, if-

(a) he, the insolvency professional entity of which he is a partner or a director, and all the partners and directors of the said insolvency professional entity are independent of the guarantor; 

(b) he is not subject to any ongoing disciplinary proceeding or a restraint order of the Board or of the insolvency professional agency of which he is a professional member; and 

(c) the insolvency professional entity of which he is a partner or a director, or any other partner or director of such insolvency professional entity does not represent any party in the bankruptcy process.

Explanation. – For the purposes of this sub-regulation, a person shall be considered independent of the guarantor, if he-

(a) is not an associate of the guarantor; 1[and]

(b) is not a related party of the corporate debtor 2[.]

(c) 3[***]

(2) A bankruptcy trustee, who has been an auditor of the guarantor at any time during the preceding three years, shall make a disclosure of remuneration received, year-wise for such audit, to the committee.

(3) An insolvency professional, other than who has filed an application under section 122 or 123 on behalf of a guarantor or a creditor, as the case may be, shall provide a written consent in Form A to the Adjudicating Authority before his appointment as bankruptcy trustee in a bankruptcy process.


References

1. Inserted by IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024 vide Notification No. IBBI/2023-24/GN/REG108 dated 31st January, 2024, w.e.f. 31.01.2024.

2. Substituted by IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024 vide Notification No. IBBI/2023-24/GN/REG108 dated 31st January, 2024, w.e.f. 31.01.2024, for the mark and word “; and”.

3. Omitted by IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) (Amendment) Regulations, 2024 vide Notification No. IBBI/2023-24/GN/REG108 dated 31st January, 2024, w.e.f. 31.01.2024, the sub-clause:

“(c) has not acted or is not acting as interim resolution professional, resolution professional or liquidator in respect of the corporate debtor.“.



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