IBBI Regulations on the Fast-track Corporate Insolvency Resolution Process, 2017
Providing a procedural framework for ‘fast-track’ insolvency resolution of certain corporate persons
The Insolvency and Bankruptcy Code, 2016 (Code) originally provided an outer time-limit of 270 days for completion of the corporate insolvency resolution process. However, recognizing that it would be value-destructive for certain debtors to undergo prolonged insolvency proceedings, the Bankruptcy Law Reforms Committee had recommended a significantly shorter time-period for the conclusion of the corporate insolvency resolution process for debtors with simpler debt structures or a relatively smaller scale of operations. Based on this recommendation, the Code contains a separate chapter titled ‘Fast Track Corporate Insolvency Resolution Process’, which mandates a shorter time-line of 90 days, which may be extended for a further period of 45 days, for insolvency resolution of eligible corporate debtors. The Central Government is empowered to notify the classes of corporate debtors, on the basis of their asset size and level of income, debt structure or any other additional factors, to whom this Chapter would apply. Accordingly, the Central Government, vide a notification dated June 14, 2017, has notified following classes of corporate debtors that would be eligible to avail the provisions of this Chapter: (i) start-ups (other than partnership firms), (ii) unlisted companies with total assets not exceeding Rs. 1 crore, and (iii) small companies (as defined under Companies Act, 2013).
To implement the Chapter on ‘Fast Track Corporate Insolvency Resolution Process’, the IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 was drawn up, which provide a detailed framework for conducting a fast-track corporate insolvency resolution process under the Code.
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About the Contributors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School. He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Shreya was a Research Fellow at Vidhi.
