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IBBI (Liquidation Process) (Amendment) Regulations 2018 - Notified

Mar 28, 2018: The IBBI had invited comments from public, including the stakeholders and the regulated, on the regulations already notified under the Insolvency and Bankruptcy Code, 2016 (Code) by 31st December, 2017.

The comments received on the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 have been considered by the Advisory Committee on Corporate Insolvency and Liquidation and thereafter by the Governing Board of the IBBI.

Accordingly, the IBBI has notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2018 today.

Important amendments effected by the the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2018 are:

a. The regulations allow a liquidator to sell an asset on a standalone basis. These also allow the liquidator to sell the assets in a slump sale, a set of assets collectively, or the assets in parcels. The amendments now allow the liquidator to sell the corporate debtor as a going concern.

b. The amendments provide that the liquidation cost includes interest on interim finance for a period of twelve months or for the period from the liquidation commencement date till repayment of interim finance, whichever is lower.

The amendment regulations are effective from 1st April, 2018.

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The Insolvency and Bankruptcy Board of India IBBI's Notification No. IBBI/2017-18/GN/REG028 dated the 27th March, 2018, is reproduced hereunder:—

In exercise of the powers conferred by clause (t) of sub-section (1) of section 196 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations to amend the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, namely:-

1. (1) These regulations may be called the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2018.

(2) They shall come into force on 1st April, 2018.

2. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, (hereinafter referred to as the principal regulations), in regulation 2, after clause (e), the following clause shall be inserted, namely: -

“(ea) “liquidation cost” under sub-section (16) of section 5 means-
    (a) fee payable to the liquidator under regulation 4;
    (b) remuneration payable by the liquidator under regulation 7;
    (c) cost incurred by the liquidator under regulation 24; and
    (d) interest on interim finance for a period of twelve months or for the period from the liquidation commencement date till repayment of interim finance, whichever is lower.”.

3. In the principal regulations, in regulation 3, in sub-regulation (1), in clause (c), in sub-clause (i), for the words ‘company secretaries’, the words ‘secretarial auditors’ shall be substituted.

4. In the principal regulations, in regulation 32, -

(I) in clause (b), for sub-clause (iii), the following sub-clause shall be substituted, namely:-
     “(iii) the assets in parcels; or”;

(II) after clause (b), the following clause shall be inserted, namely:-
    “(c) sell the corporate debtor as a going concern.”.



Note: The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were published vide notification No. IBBI/2016-17/GN/REG005 on 15th December, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, No. 460 dated 15th December, 2016 and these have not been amended so far.

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