IBBI notifies amendments to streamline corporate insolvency process
By enabling concurrent invitations, the resolution process can reduce timelines, prevent value erosion in viable segments, and encourage broader investor participation, IBBI said.
The IBBI has notified amendments to the regulations governing corporate insolvency, aiming to streamline procedures, protect creditor interests, and encourage greater investor participation in resolution processes.
The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency Resolution Process for Corporate Persons Fourth Amendment regulations, 2025 on May 26, according to a release.
Among the significant change introduced is a provision for allowing resolution professionals with the Committee of Creditor's (CoC) approval, to invite expressions of interest not only for the entire corporate debtor but also for individual assets or a combination of both.
By enabling concurrent invitations, the resolution process can reduce timelines, prevent value erosion in viable segments, and encourage broader investor participation, IBBI said.
The regulations also revise the framework for payments under resolution plans executed in stages. In such cases, financial creditors who did not support the resolution plan will now receive payments at least on a pro rata basis and ahead of those who voted in favour.
The Board said this approach balances the legitimate rights of dissenting creditors with the practical constraints of phased implementation.
In another notable amendment, the CoC has been empowered to direct resolution professionals to invite the interim finance providers to attend its meetings as observers without voting rights.
As per IBBI, this measure is aimed to provide interim finance providers with a better understanding of the corporate debtor's operational status, thereby enabling them to make well-informed decisions regarding funding requirements.
The amended norms also mandate the resolution professionals to present all received plans, including non-compliant ones to the CoC along with relevant details, it said.
This provision ensures that the CoC has access to comprehensive information for decision-making, which may lead to more informed choices and ultimately contribute to a more transparent and effective resolution process, IBBI added.