IBBI eases norms of insolvency resolution process

The Insolvency and Bankruptcy Board of India (IBBI) has introduced a new amendment to the Insolvency and the Bankruptcy Code stating that a resolution plan should be adopted that shall include a statement as to how it has dealt with interests of all stakeholders, including financial creditors and operational creditors of the corporate debtor. The IBBI has also amended regulations pertaining to Insolvency Resolution Process for Corporate Persons as well as to Fast Track Insolvency Resolution Process for Corporate Persons The Insolvency and the Bankruptcy Code came into operation in December last year and the act is designed to provide a resolution process to insolvent companies. A resolution process is initiated only once it is approved by National Company Law Tribunal(NCLT). In order to provide more leeway, the IBBI has amended the rules for information utilities. With this amendment, a listed Indian company can hold up to 100 per cent stake in an information utility which stores financial information that helps to establish defaults as well as verify claims expeditiously. Furthermore, with these latest amendments, a person can either alone or together with the person acting in concert have a maximum of 51 per cent stake in an information utility for upto three years from the date of its registration. Also, an Indian Company listed in India can hold upto 100 per cent of the paid-up equity share capital or total voting power of an information utility for three years from the date of inception. Before these amendments were introduced, a person is allowed to hold up to 51 per cent in an information utility for a maximum of three years.