Home Acts & Rules Insolvency and Bankruptcy Regulation Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021 Chapters List Chapter IX RESOLUTION PLAN This
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Regulation 42 - Scoring and improvement of resolution plans - Insolvency and Bankruptcy Board of India (Pre-packaged Insolvency Resolution Process) Regulations, 2021Extract CHAPTER IX RESOLUTION PLAN 42. Scoring and improvement of resolution plans. For the purposes of consideration of resolution plans,- (i) basis for evaluation , includes the parameters to be applied and the manner of applying such parameters, as approved by the committee, for evaluating a resolution plan to assign a score to the plan, and disclosed in the invitation for resolution plans. Illustration 1 The committee may identify three parameters, namely, X, Y and Z for evaluation of resolution plans. It may apply these parameters in the form of a formula, namely, 1.5 X + 2 Y + 2.5 Z. Where the values of X, Y and Z are 20, 25, and 30 respectively, the score of the resolution plan is 1.5 (20) + 2 (25) + 2.5 (30) = 155. Illustration 2 The committee may identify three parameters, namely, X, Y and Z for evaluation of resolution plans. It may apply these parameters in the form of a formula, namely, 1.5 X + 2 Y + 2.5 Z, subject to X being not less than 20. Where the values of X, Y and Z are 20, 25, and 30 respectively, the score of the resolution plan is 1.5 (20) + 2 (25) + 2.5 (30) = 155. It may apply these parameters in the form of a formula, namely, 2 Y + 2.5 Z, subject to X being not less than 20. Where the values of X, Y and Z are 20, 25, and 30 respectively, the score of the resolution plan is 2 (25) + 2.5 (30) = 125. Where the values of X, Y and Z are 15, 40, and 50 respectively, the resolution plan does not meet the minimum value of X and hence this plan will not be evaluated; (ii) significantly better in relation to resolution plan, means that the score of the resolution plan is higher than that of another resolution plan by a certain number or percentage, as approved by the committee and disclosed in the invitation for resolution plans. Illustration 1 The committee may consider a resolution plan to be significantly better than another resolution plan, if the score of the former is higher than that of the latter by 10. Where resolution plans A and B have scores of 100 and 110 respectively, B is significantly better than A . Where resolution plans A and B have scores of 100 and 108 respectively, B is not significantly better than A . Illustration 2 The committee may consider a resolution plan to be significantly better than another resolution plan, if the score of the former is higher than that of the latter by 5 per cent. Where resolution plans A and B have scores of 100 and 107 respectively, B is significantly better than A . Where resolution plans A and B have scores of 100 and 104 respectively, B is not significantly better than A . (iii) tick size means minimum improvement over another resolution plan in terms of score, as approved by the committee and disclosed in the invitation for resolution plans. Illustration 1 On the basis for evaluation, resolution plans A and B have scores of 105 and 108, respectively. Resolution applicant of A may wish to improve A over B . It must improve A such that the score of A exceeds that of B at least by tick size. If tick size is 5, resolution applicant of A must improve A such that the score of A is at least 108 + 5 = 113. Illustration 2 In the example under Illustration 1, if tick size is 5 per cent., resolution applicant of A must improve A such that the score of A is at least 108 X 1.05 = 113.4.
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