IBBI Proposes Reforms For Efficient Liquidation Process

The Insolvency and Bankruptcy Board of India has released a revised format for progress report submission during liquidation process. Stakeholder feedback is requested by July 12th.

Both insolvency professionals and adjudicating authorities would benefit from the initiative since it will provide a standardised approach to reporting. It will also guarantee clarity and consistency throughout in all submissions.

"To streamline the process and ensure uniformity in the structure of these reports filed by the liquidators before the Adjudicating Authority, it would be beneficial for insolvency professionals and the adjudicating authority if there were a standardised format," the IBBI said.

In February this year, IBBI in a circular, mandated that these reports be shared with members of the stakeholders' consultation committee, contingent on a confidentiality agreement.

Currently, as per the IBBI's norms, the regulator outlines that the progress report must include various pieces of information, including details on the appointment, tenure, and cessation of appointment of professionals, and settlement of the list of stakeholders.

Further it will also include, the status of any property that remains to be sold, distributions to stakeholders, and the distribution of unsold property to stakeholders.

"Additionally, the report should cover the fee due to and received by the liquidator, the remuneration or fee paid to professionals appointed by the liquidator, developments in any material litigation involving the corporate debtor, and the filing and developments in applications for avoidance of transactions," the insolvency regulator said in the circular.

In the circular, which was issued on June 21, the IBBI -- a statutory body under the Ministry of Corporate Affairs -- has invited public comments by July 12.

(Text inputs from PTI)