IBBI Notifies Key Amendments to Streamline Corporate Insolvency Process

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) has notified amendments to the regulations governing corporate insolvency, aiming to streamline procedures, protect creditor interests, and encourage greater investor participation in resolution processes. Among the significant change introduced is a provision for allowing resolution professionals with the Committee of Creditor’s (CoC) approval, to invite expressions of interest not only for the entire corporate debtor but also for individual assets or a combination of both. By enabling concurrent invitations, the resolution process can reduce timelines, prevent value erosion in viable segments, and encourage broader investor participation, IBBI said. The regulations also revise the framework for payments under resolution plans executed in stages.

In such cases, financial creditors who did not support the resolution plan will now receive payments at least on a pro rata basis and ahead of those who voted in favour. In another notable amendment, the CoC has been empowered to direct resolution professionals to invite the interim finance providers to attend its meetings as observers without voting rights to provide a better understanding of the corporate debtor’s operational status, thereby enabling them to make well-informed decisions regarding funding requirements.