The President of India promulgated the Insolvency and Bankruptcy Code (Amendment) Ordinance 2018 on 6 June 2018 (Ordinance) to amend the Insolvency and Bankruptcy Code 2016 (IBC). In the short history of around one and half years since the provisions relating to corporate insolvency resolution process under IBC came into force in December 2016, the Ordinance marks the second amendment to IBC. |
Between 31 May to 1 June, the Securities and Exchange Board of India (SEBI) amended a number of securities regulations to provide certain dispensations for listed companies undergoing the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code 2016 (IBC). These amendments follow SEBI’s discussion paper of March 2018, which set out specific proposals for adjusting the regulatory framework to allow listed companies to comply with their obligations under securities laws. |
TIME LIMIT FOR RECTIFICATION AND ADMISSION IS DIRECTORY
It is pertinent to note that Section 9 (5) of Insolvency and Bankruptcy Code, 2016 provides the time limit for admission and rejection of the application and also the time limit for rectification of the defect in the application:
SECTION 9(5)
“Section 9 (5) – The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order—
TIME LIMIT FOR RECTIFICATION AND ADMISSION IS DIRECTORY
It is pertinent to note thatSection 9 (5) of Insolvency and Bankruptcy Code, 2016 provides the time limit for admission and rejection of the application and also the time limit for rectification of the defect in the application:
SECTION 9(5)
Employees as Operational Creditor
The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “Code”) considers all employees and workmen as operational creditors.
Operational Creditor is defined under Section 5 (20) of the IB Code as:
"Operational creditor"means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred;”
Background
In our previous publication on the subject, we had discussed the changes introduced by the Ordinance dated 23 November 2017 (the Ordinance), amending the Insolvency and Bankruptcy Code, 2016 (Code) (see our Ergo Newsflash dated 24 November 2017).
Companies undergoing corporate insolvency resolution process tend to be in dire need of funds to meet their working capital expenses. Interim finance can be an important tool for effective reorganization so as to prevent liquidation.
Background |
The Insolvency and Bankruptcy Board of India has amended the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 with effect from February 7, 2018, and has brought into force the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2018[1]. The salient features of the new regulations have been discussed hereunder.
Appointment of registered valuers
Enforced with the objective of time-bound insolvency resolution and maximization of assets, the Insolvency Bankruptcy Code, 2016 (hereinafter referred to as “IBC”), in order to facilitate the process of insolvency resolution, has provision for appointment of an insolvency resolution professional (hereinafter referred to as “IRP”).