Left Menu
Development News Edition

IBBI amends liquidation process norms


IBBI amends liquidation process norms

The Insolvency and Bankruptcy Board of India (IBBI) has amended the norms for liquidation process wherein a secured creditor is barred from selling assets of a company to any person restricted from submitting insolvency resolution plan. The Insolvency and Bankruptcy Code (IBC) provides for time-bound and market-linked resolution process for stressed corporates. In case the resolution process does not materialise, then the entity goes for liquidation.

An official release on Tuesday said the IBBI has notified changes to liquidation process regulations. "The amendment clarifies that a person, who is not eligible under the code to submit a resolution plan for insolvency resolution of the corporate debtor, shall not be a party in any manner to a compromise or arrangement of the corporate debtor under section 230 of the Companies Act, 2013," it said.

Further, a secured creditor cannot sell or transfer an asset, which is subject to security interest, to any person who is not eligible under the code to submit a resolution plan for insolvency resolution of the corporate debtor. "The amendment provides that a secured creditor, who proceeds to realise its security interest, shall contribute its share of the insolvency resolution process cost, liquidation process cost and workmen’s dues, within 90 days of the liquidation commencement date," the release said.

Also, the secured creditor has to pay excess of realised value of the asset, which is subject to security interest, over the amount of its claims admitted, within 180 days of the liquidation commencement date. According to the release, where the secured creditor fails to pay such amounts to the liquidator within 90 days or 180 days, as the case may be, the asset should become part of Liquidation Estate.

Among others, the amendment provides that a liquidator should deposit the amount of unclaimed dividends and undistributed proceeds in a liquidation process along with any income earned thereon into the corporate liquidation account before an application for dissolution is submitted. The revised norms also provides a process for a stakeholder to seek withdrawal from the corporate liquidation account.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION/BLOG/INTERVIEW

Future of Food: Technology fostering the road to global food security

Technological innovation can help address most of the pressing issues facing the world today including food security by enhancing productivity, improving financial services, managing resources, addressing environmental concerns, etc....

Conspiracy theories on COVID 19: Legislators, Scientists, and Journalists all joined the Caravan

Conspiracy theories are not new for virus epidemics. There have been conspiracy theories on HIV-AIDS, Polio Vaccines, Ebola Virus, and several other diseases as well. However, what makes the 2019 Novel Coronavirus different from others is ...

Now it’s a war, Uganda deploys army to combat locust swarms

Its for the first time after 1986, the locust swarms have attacked Uganda twice in a season. With the increasing number of countries of Africa under attack by locust swarms, the problem seems to have taken a regional paradigm. Its very diff...

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...

Videos

Latest News

WRAPUP 1-Turkey, with more dead troops, won't stop Syrian refugees reaching Europe

Turkey, faced with a new wave of Syrian migrants and 22 more dead soldiers in Idlib, will no longer stop Syrian refugees from reaching Europe, a senior Turkish official said late on Thursday as President Tayyip Erdogan chaired an emergency ...

U.S. spy agencies monitor coronavirus spread, concerns about India

U.S. intelligence agencies are monitoring the global spread of coronavirus and the ability of governments to respond, sources familiar with the matter said on Thursday, warning that there were concerns about how India would cope with a wide...

EXCLUSIVE-U.S. mulls using sweeping powers to ramp up production of coronavirus protective gear

President Donald Trumps administration is considering invoking special powers through a law called the Defense Production Act to rapidly expand domestic manufacturing of protective masks and clothing to combat the coronavirus in the United ...

US CDC chief says aggressively evaluating whether coronavirus survives on surfaces

Robert Redfield, director of the U.S. Centers for Disease Control and Prevention CDC, told the U.S. Congress on Thursday that his agency is aggressively evaluating how long coronavirus can survive and be infectious on surfaces.On copper and...

Give Feedback