The Union Cabinet has approved amendments to the Insolvency and Bankruptcy Code 2016 proposed in the Insolvency & Bankruptcy (Second) Amendment Bill 2019. Amongst others, the amendments relate to the ring fencing of the Corporate Debtor(CD), post its resolution, from criminal proceedings for offences committed by previous management and promoters and maintaining of the licenses, permits, concessions, clearances etc of the CD during the period of moratorium, to enable it to continue as a going concern . Further, additional thresholds have been introduced for Financial Creditors to prevent frivolous triggering of the resolution process for small amounts. The Financial Creditors will be represented by an authorized representative due to their large numbers.
Specifically, the sections that are proposed to be amended are : (i) Section 5(12), definition of ‘insolvency commencement date’; (ii) Section 15(5), definition of ‘interim finance’; (iii) Section 7, initiation of CIRP by financial creditor; (iv) Section 11, persons not entitled to make application; (v) Section 14, moratorium; (vi) Section 16(1), appointment of interim resolution professional by Adjudicating Authority; (vii) Section 21(2), composition of Committee of Creditors; (viii) Section 23(1) RP to conduct CIRP and manage operations of the corporate debtor; (ix) Section 29A, persons not eligible to be resolution applicant; (x) Section 227, power of Central Government to notify financial sector providers, etc.; (xi) Section 239, Central Government’s power to make rules; (xii) Section 240, IBBI’s power to make regulations. A new section 32A has also been inserted.
To refer to the press release dated 11 December 2019, click here.
This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm.
The Bar Council of India does not permit solicitation of work and advertising by legal practitioners and advocates. By accessing the Shardul Amarchand Mangaldas & Co. website (our website), the user acknowledges that:
The user wishes to gain more information about us for his/her information and use. He/She also acknowledges that there has been no attempt by us to advertise or solicit work.
Any information obtained or downloaded by the user from our website does not lead to the creation of the client – attorney relationship between the Firm and the user.
None of the information contained in our website amounts to any form of legal opinion or legal advice.
All information contained in our website is the intellectual property of the Firm.