Insolvency | Bankruptcy Law: IBC panel recommends changes to revamp insolvency resolution process–Economic Times–04.04.2018

Watch IBC revamp details as panel recommends changes in resolution process

The MS Sahoo-led Insolvency and Bankruptcy panel has recommended changes to the insolvency resolution framework in its report which was released by the ministry of corporate affairs today.

The panel has recommended changes to the insolvency resolution framework to make it flexible for Resolution Professionals to raise interim finance. The panel’s recommendations on interim finance states that interest should be calculated till one year after the liquidation date or repayment whichever is earlier. Currently, the interest is calculated only till the liquidation date.

The norms will help banks, ARCs to extend interim finance to companies undergoing bankruptcy process without the fear of losing out on interest.

ET Now had reported the same on March 30.

The panel also reduced the threshold for CoC vote to 66 per cent from the current 75 per cent for extending the resolution period. Authorised representatives of financial creditors have been allowed to join the CoC for voting and attending meetings.

The panel also recommended 90 per cent threshold for CoC to decide on withdrawal of IBC process after admission by the NCLT.

On trading of a comapny’s shares which has been admitted for the resolution process, the IBC panel has said trading should not be suspended as it leads to better price discovery.

The panel also said that time bound approval from regulatory bodies should be put in place after the approval from NCLT in case of successful bids. For the approval, specific guidelines should be put in place.

The panel also said that the NCLT should have the power to direct Insolvency and Bankruptcy Board of India (IBBI) to replace the Resolution Professional.

via Insolvency | Bankruptcy Law: IBC panel recommends changes to revamp insolvency resolution process

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