Brief Overview:
The IBBI has introduced the Fifth Amendment to the CIRP Regulations, focusing on enhanced disclosure and transparency in resolution processes. Key changes include:
1) Mandatory Disclosure of Avoidance Transactions: The Information Memorandum (“IM”) must disclose details of all identified avoidance transactions, fraudulent or wrongful trading (“Avoidance Transactions”) and their applications filed before the Adjudicating Authority.
2) Restriction on Assignment of Avoidance Transactions: A resolution plan cannot provide for assignment of Avoidance Transactions unless they have been disclosed in the IM and communicated to the prospective resolution applicants before the final date of plan submission.
This restriction does not apply to plans submitted to the Adjudicating Authority on or prior to the commencement of the Fifth Amendment Regulations.
3) Inclusion of Subsequent Updates in IM: The amendment explicitly requires the resolution professional to provide the IM to each committee member on or before the ninety-fifth day from the insolvency commencement date, and to include all ‘subsequent updates’, ensuring continuous and up-to-date disclosure throughout the process.
Technical Details:
The Insolvency and Bankruptcy Board of India has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fifth Amendment) Regulations, 2025 with effect from 4th July 2025.
For further details, please see:
https://ibbi.gov.in/uploads/legalframwork/c6396cff47bd23b1b6a5445da6e905cc.pdf
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