IBBI to speed up insolvency process

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The Insolvency and Bankruptcy Board of India (IBBI) has amended the voluntary liquidation process (VLP) regulations, effective from 5 April 2022, with an aim to reduce the timeline for completion of the liquidation process of stressed assets.

The amendment has also substituted “corporate debtor” as used in regulation 10(2) with “corporate persons”. As per the amended regulations, the liquidator needs to inform the IBBI within seven days from his or her appointment date, and needs to complete the process and submit the final reports within 270 days in cases where creditors’ claims are present, and 90 days where there are none, as opposed to 12 months earlier.

Further, the liquidator shall distribute the proceeds from realisation within 30 days from receipt of the amount to the stakeholders, compared to six months previously.