In a bid to enable insolvency professional entities to take on the responsibility of administering businesses going through the bankruptcy process, the Insolvency and Bankruptcy Board of India (IBBI) has modified the regulations regulating those entities.
The IBBI streamlined the rules governing their enrolment for the duty of managing insolvent companies with the Model Bye-Laws and Governing Board of Insolvency Professional Agencies (Amendment) Regulations, 2022. The regulations also include significant adjustments that are required to support this.
The change is noteworthy since, prior to this, only the resolution specialist hired by lenders to manage the troubled enterprises was permitted to get assistance from bankruptcy professional entities.
These organisations have multidisciplinary knowledge that will be useful in managing the bankruptcy resolution of large and complicated businesses. It was reported earlier that incorporated organisations, such as corporations, will be permitted to manage bankrupt enterprises instead of the administrators appointed by lenders.