Regulator IBBI has proposed changes to the norms governing the insolvency resolution process for personal guarantors to corporate debtors, including the exclusion of related parties of the guarantor from voting on the repayment plan.
Besides, the watchdog plans to make valuation of a personal guarantor’s assets mandatory during the resolution process, as well as put in place the framework for recording creditors’ deliberations on the repayment plan.
In the proposed amendments in the rules to strengthen safeguards in the insolvency resolution process for personal guarantors to the corporate debtors, IBBI has also called for identification and reporting of avoidance transactions (preferential, undervalued, fraudulent, and extortionate credit transactions) in the insolvency resolution process.
The proposals come against the backdrop of the insolvency case involving Essel Group chairman Subhash Chandra, wherein under a settlement plan it was proposed that creditors could recover just ..
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