INVC NEWS
New Delhi : The Insolvency and Bankruptcy Board of India (IBBI) has recently announced amendments to the norms governing the corporate insolvency resolution process. These changes, aimed at enhancing transparency and efficiency, represent a significant step towards optimizing the resolution framework in India.
Mandatory Separate Accounts for Each Real Estate Project
One of the key amendments introduced by the IBBI mandates the maintenance of separate accounts for each real estate project undergoing resolution. This measure is designed to ensure meticulous tracking and management of funds allocated to individual projects, thereby enhancing transparency and accountability in fund utilization.
Establishment of Monitoring Committee by Creditors’ Committee
In addition to the above, the Committee of Creditors (CoC) will now have the authority to form a monitoring committee tasked with overseeing the implementation of the resolution plan. This proactive approach towards monitoring aims to facilitate smoother execution of resolution plans and minimize discrepancies in the process.
Provision for Explaining Valuation Methodology to CoC Members
To promote transparency and mitigate disputes related to valuation, the revised norms include a provision for explaining the valuation methodology to CoC members. This initiative seeks to empower stakeholders with a deeper understanding of valuation principles, thereby fostering informed decision-making and reducing conflicts.
Integration of Fair Value in Information Memorandum
In a bid to encourage informed participation, the IBBI has suggested incorporating fair value information into the information memorandum. This strategic inclusion aims to provide stakeholders with comprehensive insights into the valuation process, enabling them to make well-informed decisions throughout the resolution process.
Flexibility in Information Disclosure by CoC
Furthermore, the revised norms grant the CoC the flexibility to decide whether certain information, including fair value details, should be disclosed based on its perceived benefits to the resolution process. This discretion ensures that sensitive information is shared judiciously, safeguarding the interests of all stakeholders involved.
Separate Resolution Plan for Each Real Estate Project
In alignment with the focus on individual project accountability, the IBBI has emphasized that the CoC may request separate resolution plans for each real estate project. This tailored approach aims to address project-specific challenges effectively, thereby optimizing the overall resolution process.
