IBBI Issues Revised Guidelines For Insolvency Professionals Willing To Act As IRP, RP, Liquidator & Bankruptcy Trustee

On 08.12.2023, the Insolvency and Bankruptcy Board of India (“IBBI”) has issued the 'Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) (Second) Guidelines, 2023” (“Revised Guidelines”).The Panel of Insolvency Professionals prepared as per the Revised Guidelines dated 08.12.2023 shall be effective from 01.01.2024 to 30.06.2024. The Revised Guidelines provide the eligibility criteria, manner of expression of interest, scoring criteria and conditions for Insolvency Professionals.The previous guidelines issued on 12.06.2023 have been repealed. BRIEF BACKGROUNDThe IBBI is required to recommend the name of an Insolvency Professional (“IP”) on receiving reference from the National Company Law Tribunal and Debt Recovery Tribunal (Adjudicating Authority), in respect of Corporate Insolvency or Individual Insolvency, as the case may be, for appointment as an Interim Resolution Professional (IRP), Resolution Professional (RP), Liquidator and Bankruptcy Trustee (BT) under provisions of the Insolvency and Bankruptcy Code, 2016 (“Code”). Further, Rule 8(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 and Rule 8(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019, enables the Board to share a Panel of IPs, who may be appointed as resolution professionals or bankruptcy trustee, with the Adjudicating Authority. The IBBI deemed it adequate to prepare the panel of IPs in advance and share with the Adjudicating Authority (AA) to avoid administrative delays in appointment of the IP. Thus, the revised guidelines have been issued. The detailed provisions under the Guidelines are as under:ELIGIBILITY OF INSOLVENCY PROFESSIONALAn IP is eligible to be included in the panel, if ―There is no disciplinary proceeding, whether initiated by the Board or the IPA, pending against IP;IP has not been convicted at any time in the last three years by a court of competent jurisdiction;IP has submitted expression of interest along with consent to act as Interim Resolution Professional, Resolution Professional, Liquidator and Bankruptcy Trustee, on appointed by the National Company Law Tribunal and Debt Recovery Tribunal; IP holds an Authorisation for Assignment (AFA), which is valid till the validity of Panel. For example, the IP included in the Panel for appointments during January 01 – June 30, 2024, should have AFA valid up to June 30, 2024.EXPRESSION OF INTERESTThe Board shall invite expression of interest from IPs in Form A by sending an e-mail to their email addresses registered with the Board. The expression of interest must be received by the Board in Form A by the specified date. The submission of expression of interest is an unconditional consent by the IP to act as an IRP, Liquidator, RP or BT of any process relating to a corporate or individual debtor, as the case may be. The IPs can submit their expression of interest by December 25, 2023. The Board will send the Panel to the AA by December 29, 2023. IPs are also required to fill the Sectors in which they have handled assignments or are handling assignments under the Code. The name of the Sectors is to be chosen from the dropdown list mentioned in the Form. If the IP selects the option 'Others', he must mention the name of the sector.PANEL OF IPsThe Board will prepare a common Panel of IPs for appointment as IRP, Liquidator, RP and BT and share the same with the AA (Hon'ble NCLT and Hon'ble DRT) in accordance with these Guidelines. The Panel will have validity of six months. The Panel will have a Zone wise list of IPs based on the registered office (address as registered with the Board) of the IP. The AA may pick up any name from the Panel for appointment of IRP, Liquidator, RP or BT, for a CIRP, Liquidation Process, Insolvency Resolution process or Bankruptcy Process relating to a corporate debtor and personal guarantor to corporate debtor, as the case may be.SCORING CRITERIAIn order to achieve the objectives of the Code it is imperative to give due consideration to the experience gained by IP in handling assignments of liquidation and corporate insolvency resolution process under the Code. Accordingly, the eligible IPs will be included in the Panel in the order of the volume of completed assignments in the order of experience. Where two or more IPs get the same score, they will be placed in the Panel in the order of date of their registration with the Board. The IP registered earlier will be placed above the IP registered later.CONDITIONS FOR IPsThe inclusion of the name of the IP in the panel will be deemed acceptance to act as IRPs, Liquidator, RP or BT, as the case may be, on being appointed by the National Company Law Tribunal or the Debt Recovery Tribunal, as the ...

IBBI Issues Revised Guidelines For Insolvency Professionals Willing To Act As IRP, RP, Liquidator & Bankruptcy Trustee

Pallavi Mishra

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