IBBI Proposes Stricter Tests For Bankruptcy Going-Concerns
The Insolvency and Bankruptcy Board of India on Monday released draft regulations proposing that businesses entering insolvency be tested for viability within the first 30 days and that interim resolution professionals limit operations. The draft, which also allows delayed creditor claims, excludes certain related-party operational creditors and tightens creditor recordkeeping, is open for public comment until March 10 to strengthen oversight and reduce value erosion.
Key Points
- 1Require interim resolution professionals to limit operations and test viability within first 30 days
- 2Strengthen creditor oversight and transparency by excluding related-party operational creditors and detailed recordkeeping
- 3Oblige resolution professionals and creditors to approve subsequent expenditures based on periodic cashflow estimates
Scoring Rationale
Official IBBI draft proposes substantive insolvency procedural reforms; limited relevance to data science reduces portal impact.
Sources
Public references used for this report.
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