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ARTICLE · 17 JULY 2024

Decoding Regulation 39(1A) Of Cirp Regulation

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Regulation 39(1A) of CIRP Regulations permits limited modifications and competitive improvements to resolution plans. Courts affirm the Committee of Creditors' (CoC) discretion to negotiate and enhance financial proposals, emphasizing the CoC's commercial wisdom and the objective of maximizing debtor value while adhering to resolution timelines.

IndiaInsolvency/Bankruptcy/Re-Structuring
Jyoti A Singh
Jyoti A Singh
Nishi Agrawal
Nishi Agrawal
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In the complex landscape of insolvency and bankruptcy proceedings, the resolution plan is a crucial document that outlines the strategy for resolving a debtor's financial distress. The resolution plan must meet various regulatory requirements to ensure fairness and feasibility. However, questions often arise regarding the permissibility of revising these plans, particularly when it involves both modifications to the plan and an increase in the financial proposal. The same is governed by Regulation 39 (1A) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations).

Regulation 39 (1A) states that- "The resolution professional may, if envisaged in the request for resolution plan- (a) allow modification of the resolution plan received under sub-regulation (1), but not more than once; or (b) use a challenge mechanism to enable resolution applicants to improve their plans"

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