Amended Regulations for Speeding Up the Insolvency Resolution Process

Debt Assignment Intimation

The creditors claiming insolvency in India must apprise the resolution professional of all the details within seven days of any assignment or transfer of debt.

Debtor Information Handover

The amended insolvency regulations outline the process for the corporate debtors to prepare a list of assets and transfer all records to the assigned resolution professional, who will offer help if the list is not already prepared. Failing to hand over the prescribed information may lead to the judiciary involvement by the National Company Law Tribunal.

Authorised Representatives for Creditors

With the amendment in place, Authorized Representatives who represent creditors have increased responsibilities – they must help creditors understand issues in CoC meetings, evaluate and modify resolution plans, facilitate communication, and assist in designing marketing. 

The financial creditors who have a minimum of 10% voting share can replace, at an additional fee, their authorized representative with another insolvency professional after approval from the resolution professional. 

Revision of Expression of Interest Form

The regulatory body has introduced a revised Form G to provide resolution applicants direct access to the debtor’s financial data, including statements of the past two years and the list of other creditors. The form also specifies the dates pertinent to the resolution process.

When carried out well, the insolvency process provides the company with a structured framework to address its financial troubles. However, legal disputes and lack of clarity may protract the insolvency resolution process. Such delays affect and lower investors’ confidence, creditors’ interest, and stakeholders’ trust in the company. 

Consultancies like Corporate Leaps can assist you in understanding the framework and streamline your insolvency resolution plan in India, which will prevent any delays that could further affect your business’s financial health.