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ARTICLE · 27 SEPTEMBER 2022

IBBI Amends CIRP Regulations - A Booster Dose For Resolution Process?

IBBI amended IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) on 16 September 2022 to attract investors and market participants in resolution...

IndiaInsolvency/Bankruptcy/Re-Structuring

Introduction

IBBI amended IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) on 16 September 2022 to attract investors and market participants in resolution of the stressed assets. It is no secret that resolution of stressed assets under the Insolvency and Bankruptcy Code, 2016 (IBC) is facing multiple challenges, which must be addressed for IBC to be a success story. IBBI newsletters suggest that nearly 47% of insolvency process ends up in liquidation - an alarming situation. With high inflation and rising interest rates, Indian economy can barely afford high unemployment levels on account of liquidation of stressed companies, which has other cascading effect on the economy. The authorities, therefore, must ensure that stressed assets are resolved as going concerns to preserve value and employment. In our view, the amendment to the CIRP Regulations strives to encourage resolution than liquidation - a right approach.

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