IBBI Amends Norms Related To Insolvency Resolution Process For Personal Guarantors

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

Changes have been made to the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors regulations and Bankruptcy Process for Personal Guarantors to Corporate Debtors regulations.

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

In a release on Monday, IBBI said the removal of the restrictions will allow the same IP to get appointed in both the corporate process as well as the insolvency and bankruptcy proceeding of the personal guarantors to the corporate debtors for better harmonisation and effective coordination of both processes.

“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.

“This mandatory involvement of creditors brings a comprehensive and collaborative approach to the resolution process, enhancing the efficacy and fairness of the system.

“The amendment intends to foster active participation and cooperation among all stakeholders, thereby reinforcing a robust and equitable framework for addressing financial distress in PG cases,” the release said.

Meanwhile, IBBI has amended the norms to streamline the voluntary liquidation process.

With the latest changes, directors of the corporate person while initiating the voluntary liquidation process should disclose pending proceedings or assessments before statutory authorities.

With inputs from PTI.

The post IBBI Amends Norms Related To Insolvency Resolution Process For Personal Guarantors first appeared on Latest India news, analysis and reports on IPA Newspack.