IBBI amends norms related to insolvency resolution process for personal guarantors

The Insolvency and Bankruptcy Board of India (IBBI) has amended norms pertaining to insolvency resolution process for personal guarantors and voluntary liquidation process..

Restrictions have been removed for an Insolvency Professional (IP) to be appointed as a Resolution Professional (RP) for the process for personal guarantors...

"The amendment removes restrictions on an IP to be appointed as RP or Bankruptcy Trustee (BT) in the insolvency resolution process or bankruptcy process of Personal Guarantors (PGs) to Corporate Debtors (CDs) respectively, if she has acted or is acting as interim resolution professional, RP or liquidator during the corporate insolvency resolution process (CIRP) or liquidation process of the CD," it said.. To address complexities and unique challenges inherent in the PG cases, IBBI said the amendments also aim to make the convening of meeting of creditors mandatory...

The directors also have to disclose pending litigations, which help to declare that sufficient provision has been made to meet all obligations, on account of pending proceedings, the regulator said in a separate release on Monday.. As per IBBI, if the liquidator fails to liquidate the corporate person within a stipulated period of 90 or 270 days, there should be a meeting of contributories of said corporate person and the liquidator should present a status report within 15 days from the end of such period, specifying reasons for delay...

The liquidator would also have to apprise the meeting of the additional time required for completing the process, the release said.. "In the period after submission of the final report but before a corporate person is dissolved, stakeholders claiming entitlement to funds in the corporate voluntary liquidation account can apply to the liquidator for withdrawal," it added...

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