bankruptcy

Determination of Liquidator Fee-realised amount not distributed or distributed amount not realised

Determination of Liquidator Fee where realised amount not distributed or amount distributed but not realised

Determination of Liquidator Fee 

IBBI (Liquidation Process) Regulations, 2016 require the committee of creditors to fix the fee payable to the liquidator. Where the fee has not been fixed by the committee of creditors, the Regulations provide for a fee as a percentage of the amount realised and of the amount distributed by the liquidator. There have been instances where a liquidator realises the amount while another liquidator distributes the same to stakeholders. The amendment made to the Regulations today clarifies that where a liquidator realises any amount, but does not distribute the same, he shall be entitled to a fee corresponding to the amount realised by him. Likewise, where a liquidator distributes any amount, which is not realised by him, he shall be entitled to a fee corresponding to the amount distributed by him.

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
 
NOTIFICATION
 
New Delhi, the 5th August , 2020

Insolvency and Bankruptcy Board of India (Liquidation Process) (Third Amendment) Regulations, 2020

No. IBBI/2020-21/GN/REG062.-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, further 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) (Third Amendment) Regulations, 2020.
 
(2) They shall come into force on the date of their publication in the Official Gazette.
 
2. In the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (hereinafter referred to as the principal regulations), in regulation 4, in sub-regulation (2), in clause (b), after the Table, the following Clarification shall be inserted, namely:-
 
“Clarification: For the purposes of clause (b), it is hereby clarified that where a liquidator realises any amount, but does not distribute the same, he shall be entitled to a fee corresponding to the amount realised by him. Where a liquidator distributes any amount, which is not realised by him, he shall be entitled to afee corresponding to the amount distributed by him.”.
 
3. In the principal regulations, in regulation 37, in sub-regulation (6), the word “of” shall be omitted.
 
4. In the principal regulations, in regulation 47, in the Table, –
 
(a) in serial number 4, in column 2, for “Section 38 (1) and (5), Reg. 17, 18 and 21A”, the following shall be substituted, namely: –
 
“Section 38 (1), Reg. 17, 18, 19, 20 and 21A”;
 
(b) in serial number 18, in column 4, for the word “disclosure”, the word “disclaimer” shall be substituted.
 
Dr. M. S. SAHOO, Chairperson
[ADVT./III/4/Exty./169/2020-21]
 
Note: The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 were published vide notification No. IBBI/2016-17/GN/REG005 dated 15th December, 2016 in the Gazette of India, Extraordinary, Part III, Section 4, vide No. 460 on 15th December, 2016 and were last amended by the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2020 vid e notification No. IBBI/2020-21/GN/REG060, dated the 20th April, 2020 in the Gazette of India, Extraordinary, Part III, Section 4, No. 157 on 24th April, 2020.Loaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.
 

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