NEW DELHI : The Insolvency and Bankruptcy Board of India (IBBI) will set up panels of resolution professionals based on the location of their head office and the volume of their ongoing assignments, a database that courts can use to quickly appoint a professional to take over failing companies.
The IBBI has stated that a new set of guidelines will come into force from January 1, 2022 on the appointment of insolvency resolution professionals, liquidators and Georgia bankruptcy exemptions trustees, on the basis of which it will establish groups of experts who will be hired by the courts.
Bankruptcy courts contact the IBBI in different circumstances to recruit resolution professionals, but the process of identifying, appointing and appointing a resolution professional takes time. The proposed creation of a panel of resolution professionals will be valid for six months, after which a new panel will replace it, the IBBI said in new guidelines released on Wednesday.
“For example, the first panel under these guidelines will be valid for nominations from January to June 2022, and the next panel will be valid for nominations from July to December 2022, and so on,” IBBI said in the rule.
Usually, when a court asks the IBBI to appoint a resolution professional, the regulator does not have information on the volume, nature and complexity of an insolvency or bankruptcy process and on the resources. available to an insolvency practitioner. In such a situation, the IBBI is unlikely to add much value by recommending a professional for the process, the IBBI said explaining why the proposed panels will be useful for quick decision-making by the court.
The current appointment process can take two to three weeks, which could be saved if the tribunal has a panel of professionals recommended by the IBBI and can retrieve any name for appointment, the tribunal said. IBBI.
The regulator’s decision is in line with the government’s efforts to speed up the bankruptcy resolution process, a political priority. Avoiding delays in the resolution process is essential for preserving the value of assets available for restructuring and for effective recovery of the debtor company.
A parliamentary standing finance committee chaired by BJP chief Jayant Sinha in August reported delays in the bankruptcy resolution process, saying more than 71% of cases had been pending for more than 180 days.
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