Insolvency Resolution Process Rules Updated

The Insolvency and Bankruptcy Board of India (IBBI) has amended the corporate insolvency resolution process (CIRP) rules to bring in more transparency in the proceedings.

The new rules will require resolution professionals to prove details about their opinion on avoidance transactions of the corporate debtor, among other changes, effective from July 14, said a notification issued on Tuesday.

“The amendment regulation enhances the discipline, transparency, and accountability in corporate insolvency proceedings,” the IBBI said in a statement.

As part of the insolvency resolution process, the resolution professional must find and report to the adjudicating authority if the debtor has been subject to preferential transactions, undervalued transaction, extortionate credit transaction, fraudulent trading and wrongful trading.

“For effective monitoring the amendment requires the RP (resolution professional) to file from CIRP 8 on the Board, intimating details of his opinion and determination in respect of avoidance transitions,” said the statement.   S-ET

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