bankruptcy

Resolution professional not require approval of shareholders of the corporate debtor for insolvency resolution process

Resolution professional doesn’t require nod of shareholders/members for insolvency resolution 

Ministry vide its circular no. IBC/01/2017 dated 25.10.2017 clarified that Section 30 and 31 of the Code provide a detailed procedure from the time of receipt of resolution plan by the resolution professional to its approval by the Adjudicating Authority and there is no requirement for obtaining approval of shareholders/members of the corporate debtor during this process. 

This was stated by Shri P.P. Chaudhary, Minister of State for Corporate and Law & Justice in Rajya Sabha today.

Further, Insolvency and Bankruptcy Board of India (IBBI) also amended IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 so as to ensure that a resolution process ends up with a credible resolution plan which maximises the value of assets of the corporate debtor.

The Government promulgated The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 on 23.11.2017 to amend Insolvency and Bankruptcy Code, 2016 (the ‘Code’) in order to further strengthen the insolvency resolution process by prohibiting certain persons from submitting a resolution plan who, on account of their antecedents, may adversely impact the credibility of the processes under the Code.  The Ordinance was replaced by The Insolvency and Bankruptcy Code (Amendment) Act, 2018 on 18.01.2018.

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