STATUTORY UPDATES
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2022
- In exercise of the powers conferred by Clause (t) of Sub-Section (1) of Section 196 read with Section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (IBC), the Insolvency and Bankruptcy Board of India (IBBI) on September 13, 2022, notified the following amendments into the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Principal Regulations).
- By way of this statutory amendment, Regulation 34B 'Fee to be paid to interim resolution professional and resolution professional' has been inserted that essentially provides for the minimum fee that shall be paid an Interim Resolution Professional (IRP) or a Resolution Professional (RP). The said Regulation shall be applicable from October 01, 2022.
- In terms of the newly inserted regulation, the Applicant or the Committee of Creditors (Committee or CoC) shall decide the fee of the IRP/RP as per the fee specified in Clause 1 for the period specified in Clause 2 of Schedule-mentioned in the Regulation. The amount of fee is basically dependent upon the quantum of claims admitted. In cases where the fee is fixed higher than the amount provided in the Schedule, the CoC will have to record the reasons for granting a higher fee than what is prescribed in the Regulation.
- After the expiry of period mentioned in Clause 2 of Schedule-II, the fee of the IRP or RP shall be as decided by the Applicant or CoC, as the case may be.
- For the Resolution Plan approved by the CoC on or after October 1, 2022, the Committee may decide, in its discretion, to pay performance-linked incentive fee, not exceeding INR 5 crore, in accordance with Clause 3 (Performance-linked incentive fee for timely resolution) and Clause 4 (Performance-linked incentive fee for value maximization) of Schedule-II or may extend any other performance linked incentive structure as it deems necessary.
- The fee under this regulation may be paid from the funds available with the Corporate Debtor, contributed by the Applicant or members of the Committee and/or raised by way of interim finance and shall be included in the insolvency resolution process cost.
Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2022
- In exercise of the powers conferred by Clause (t) of Sub-Section (1) of Section 196 read with Section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (IBC), the Insolvency and Bankruptcy Board of India (IBBI) on September 13, 2022 notified certain amendments into the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (Principal Regulations).
- In view of the same, in the First Schedule, after Clause 26 of the Principal Regulations, a new Clause 26A has been inserted which directs and makes it mandatory for an insolvency professional not to accept or share any fee or charges from any professional and/or support service provider who are appointed under the processes.
Insolvency and Bankruptcy Board of India Circular regarding details of matters pending with Supreme Court of India and various High Courts
- Vide this Circular dated September 13, 2022, the IBBI has advised insolvency professionals in various cases to immediately inform IBBI about any important issues relating to constitutional validity, interpretation and applicability of the IBC, or the Rules or Regulations made thereunder which are being contested before High Courts and the Supreme Court in assignments being handled by such insolvency professionals.
- The purpose asking insolvency professionals to share such information with the IBBI is to ensure that the stand of the Union of India (Ministry of Corporate Affairs) or the IBBI does not go unrepresented.In exercise of the powers conferred by Clause (t) of Sub-Section (1) of Section 196 read with Section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016) (IBC), the Insolvency and Bankruptcy Board of India (IBBI) on September 13, 2022, notified the following amendments into the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Principal Regulations).
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