IBBI issues The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2019 (‘ Principal Reg.’) wherein Reg. 36B (4A) has been inserted .
Reg. 36B (4A) mandates resolution applicants whose resolution plan is approved by the committee of creditors to submit performance security.
Principal Reg. further defines “Performance Security” as ,
“Security of such nature, value, duration and source, as may be approved by the committee of creditors, having regard to the nature of resolution plan and business of the corporate debtor.”
In addition, Form H of the Schedule under regulation 36B (4A) has been substituted.
Thereafter, IBBI directs the Resolution Professional to attach receipt of performance security as an evidence while submitting security while submitting the resolution plan to the Adjudicating Authority for approval. IBBI further highlights that under any circumstances after the resolution plan is approved by the adjudicating authority but resolution applicant fails to implement or contributes to the failure of implementation of the plan then performance security will get forfeited.
Further, Reg. 38 (1A) has been inserted which mandates and directs that resolution plan should include a statement as to whether the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any resolution plan approved by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 at any time in the past.
Lastly, under Reg. 39 sub – regulation (9) has been inserted which empowers the creditors who are aggrieved by non-implementation of a resolution plan approved under section 31 (1) to apply the Adjudicating Authority for directions.
Click below to access IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2019 :-