NEW DELHI: The Insolvency & Bankruptcy Board of India (IBBI) has revised its regulations to give more time for filing claims, which will benefit creditorsespecially home buyers and government agencies, affected by insolvency measures in the real estate sector.
The new rules provide for an extension of the deadline for filing claims to 90 days from the date of commencement of insolvency (ICD) or the date of issuance of the final request for resolution plan (RFRP), whichever is later. Currently, claims must be filed within 90 days of the ICD.
Under the new norms, claims filed after the stipulated 90-day period must state the reason for the delay and the resolution professional must provide the reasons why the claim is not being collected. IBBI has said that for claims received after the stipulated time but seven days before the creditors’ committee meeting, the resolution professional will decide the acceptability of collection of the late claim. The decision to recommend its inclusion in the list of claims and its treatment in the resolution plan has been left to the committee of creditors – the highest decision-making body during the crisis. solution process.
For several creditors, especially home buyers, failure to file claims within the 90-day period has proven to be a problem and IBBI has decided to provide some breathing space, at least for new cases. In addition, several other creditors were unable to comply with the previous provision.
“The extension of the timeline for filing claims by creditors is a welcome relief for creditors, especially tax authorities, with legitimate claims who inadvertently fail to submit their claims to the resolution professional. However, this also creates uncertainty in the minds of a possible solution. applicants who may not have complete details of the corporate debtor’s debts at the time of invitation for expressions of interest,” said L Badri Narayanan, executive partner at law firm Lakshmikumaran and Sridharan.
Although IBBI intended to make changes to some of its regulations following the amendment of the Insolvency and Bankruptcy Code, a delay in the introduction of the Bill may have resulted in it amending some of its regulations to process to run more smoothly.
The agency has now established the process for providing information by the company and its executives to the resolution professional, as the rules were not clear.
In addition, there are changes designed to strengthen the role of authorized representatives who assist in the resolution process, to increase their interaction with the National Company Law Tribunal and the Court of Appeal and to assist creditors in formulating a marketing strategy , in addition to proposing changes to the resolution plan. Provisions have also been included to provide for their replacement.
The new rules provide for an extension of the deadline for filing claims to 90 days from the date of commencement of insolvency (ICD) or the date of issuance of the final request for resolution plan (RFRP), whichever is later. Currently, claims must be filed within 90 days of the ICD.
Under the new norms, claims filed after the stipulated 90-day period must state the reason for the delay and the resolution professional must provide the reasons why the claim is not being collected. IBBI has said that for claims received after the stipulated time but seven days before the creditors’ committee meeting, the resolution professional will decide the acceptability of collection of the late claim. The decision to recommend its inclusion in the list of claims and its treatment in the resolution plan has been left to the committee of creditors – the highest decision-making body during the crisis. solution process.
For several creditors, especially home buyers, failure to file claims within the 90-day period has proven to be a problem and IBBI has decided to provide some breathing space, at least for new cases. In addition, several other creditors were unable to comply with the previous provision.
“The extension of the timeline for filing claims by creditors is a welcome relief for creditors, especially tax authorities, with legitimate claims who inadvertently fail to submit their claims to the resolution professional. However, this also creates uncertainty in the minds of a possible solution. applicants who may not have complete details of the corporate debtor’s debts at the time of invitation for expressions of interest,” said L Badri Narayanan, executive partner at law firm Lakshmikumaran and Sridharan.
Although IBBI intended to make changes to some of its regulations following the amendment of the Insolvency and Bankruptcy Code, a delay in the introduction of the Bill may have resulted in it amending some of its regulations to process to run more smoothly.
The agency has now established the process for providing information by the company and its executives to the resolution professional, as the rules were not clear.
In addition, there are changes designed to strengthen the role of authorized representatives who assist in the resolution process, to increase their interaction with the National Company Law Tribunal and the Court of Appeal and to assist creditors in formulating a marketing strategy , in addition to proposing changes to the resolution plan. Provisions have also been included to provide for their replacement.
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