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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

Extract

..... l have the same meaning as assigned to it in relation to a debtor in sub-section (2) of section 79, as may be applicable; (b) “bankruptcy process costs” shall mean - (i) the fees payable to the bankruptcy trustee; (ii) payments and expenses referred to in sub-regulation (1) of regulation 5, sub-regulation (4) of regulation 6, sub-clause (ii) of clause (c) and clause (f) of sub-regulation (3) of regulation 10, sub-regulation (3) of regulation 28, and sub-regulation (3) of regulation 31; (iii) such other costs and expenses directly relatable to the bankruptcy process, to the extent approved or ratified by the committee; (c) “Code” means the Insolvency and Bankruptcy Code, 2016 (31 of 2016); (d) “committee” means the committee of creditors as defined in sub-section (11) of section 79; (e) “corporate debtor” means a corporate person for whom the guarantor has given a personal guarantee; (f) “electronic means” means an authorised and secured computer programme which is capable of producing confirmation of sending communication to the participant entitled to receive such communication at the last electronic mail address provided .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... ional, other than who has filed an application under section 122 or 123 on behalf of a guarantor or a creditor, as the case may be, shall provide a written consent in Form A to the Adjudicating Authority before his appointment as bankruptcy trustee in a bankruptcy process. 4. Fees of bankruptcy trustee. (1) The bankruptcy trustee shall be entitled to such fee and the fee shall be paid in such manner as decided by the committee. (2) In all cases other than those covered under sub-regulation (1), the bankruptcy trustee shall be entitled to a fee as a percentage of the amount realised from the estate of the bankrupt and of the amount distributed from such realisation, in accordance with Schedule I. 5. Appointment of professionals. (1) A bankruptcy trustee may appoint accountants, registered valuers, advocates or other professionals, as may be necessary, to assist him in the discharge of his duties, obligations and functions for a reasonable remuneration and such remuneration shall form part of the bankruptcy process cost: Provided that the following persons shall not be appointed under this regulation, namely- (a) a relative of the bankruptcy trustee; (b) a partner or director of the .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... on reliable records and data otherwise available to him. (b) the proposed plan of action in relation to administration of the estate, including the timeline in which it is proposed to be carried out and the estimated costs; (c) any further inquiry to be made in respect of the assets, business or affairs of the bankrupt; (d) details of the assets which are intended to be realised, including the following- (i) value of the assets, valued in accordance with regulation 33; (ii) intended manner of realisation of the assets and reasons thereof; (iii) expected amount of realisation; (iv) any other information that may be relevant for the realisation of the assets. (e) details of the excluded assets and other assets under sub-section (2) of section 155. (4) The preliminary report shall be confidential during the bankruptcy process, unless the Adjudicating Authority permits any person to access it subject to such terms and conditions, as it may consider appropriate. 9. Early completion of administration. At the time of the preparation of the preliminary report or any time thereafter, if it appears to the bankruptcy trustee that - (a) the realisable assets of the bankrupt are insufficient t .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... imer of onerous properties or leasehold interests under sections 160 and 162, or transactions under sections 164, 165 and 167. (i) accounts maintained by the bankruptcy trustee showing the receipts and payments made during the period of the report, as well as cumulative receipts and payments made since the bankruptcy commencement date; and (j) any other relevant aspect of the bankruptcy process. (4) The progress report for the fourth quarter of the financial year shall enclose audited accounts of the receipts and payments of the bankrupt for the financial year. (5) The progress reports shall be confidential during the bankruptcy process, unless the Adjudicating Authority permits any person to access it on specified terms and conditions. Illustration Where an insolvency professional becomes a bankruptcy trustee on 13th February, 2020 and ceases to act as such on 12th February, 2021, he shall submit progress reports as under: Report No. Period covered in the Quarter Last Date of Submission of Report 1 13th February - 31st March, 2020 15th April, 2020 2 April - June, 2020 15th July, 2020 3 July - September, 2020 15th October, 2020 4 October - December, 2020 15th January, 2021 5 Januar .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... ding administration of estate of the bankrupt as per the record retention schedule as may be communicated by the Board in consultation with insolvency professional agencies. CHAPTER III CLAIMS 14. Future claims. (1) A person, who is entitled to distribution in the same manner as any other creditor, may submit a claim, which is not due and payable on the bankruptcy commencement date, to the bankruptcy trustee. (2) Subject to any contract to the contrary, the person under sub-regulation (1) shall be entitled to the principal amount and the interest that has accrued till the bankruptcy commencement date. 15. Negotiable instruments. Where a person seeks to prove a claim in respect of a bill of exchange, promissory note or other negotiable instrument or security of a like nature for which the bankrupt is liable, a certified true copy of the same shall accompany the claim. 16. Periodical payments. In the case of rent, interest and such other payments of a periodical nature, a person may claim only for any amounts due and unpaid up to the bankruptcy commencement date. 17. Determination of quantum of claim. Where the amount claimed by a claimant is not precise due to any reason, the bankru .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... website, if any, of the bankrupt. CHAPTER IV MEETINGS OF COMMITTEE AND VOTING 21. Notice for meeting. (1) A bankruptcy trustee may convene a meeting of the committee as and when he considers necessary and shall convene a meeting on a request by creditors having not less than thirty three percent of voting share. (2) The notice under this regulation and for the meeting under section 133 shall be served on every participant at the address provided to the bankruptcy trustee. (3) A meeting of the committee shall be convened by giving a notice of seven days or such other notice as decided by the committee, provided that such notice shall not be less than forty-eight hours. (4) The notice convening the meeting of creditors shall inform the participants of the venue, the time, the date of the meeting and of the options available to - (i) participants to attend the meeting either in person, through video conferencing, or through a proxy; and (ii) creditors to cast vote in person, through a proxy, by electronic means or by electronic proxy, as the case may be. (5) The notice of the meeting shall carry the agenda, which shall include the following- (a) list of matters to be discussed; (b) li .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... y trustee, shall be allowed access to the meeting, without the permission of the bankruptcy trustee. (6) The bankruptcy trustee shall ensure that minutes are made in relation to each meeting of the creditors and are circulated to all participants by electronic means within forty-eight hours of the said meeting. 24. Voting share. (1) Subject to section 135, the voting share of each creditor shall be in proportion to the debt owed to such creditor. (2) The voting share of a secured creditor shall be in proportion to unsecured part of the debt, if any, if it has opted to enforce its security interest. (3) The voting share of a secured creditor who has opted to relinquish its security interest shall be in proportion to the amount of debt relinquished. 25. Voting by the committee. (1) The bankruptcy trustee shall take a vote of the creditors present in the meeting on any item listed for voting, after discussion on the same. (2) At the conclusion of the meeting, the bankruptcy trustee shall prepare minutes of the meeting, including the names of creditors, who voted for, against or abstained from voting on the items put to vote in the meeting. (3) The bankruptcy trustee shall- (a) circula .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... stee for the bankruptcy process; (c) any creditor or associate of the bankrupt; and (d) any company where the bankrupt or a creditor is a promoter or director. (4) The bankruptcy trustee shall not proceed with a sale, if he has reason to believe that there is any collusion amongst any one or more of the following persons: - (a) the buyers; (b) the bankrupt; (c) the creditors; (d) associates of the bankrupt or creditors; (e) the corporate debtor; or (f) related party of the corporate debtor, and shall submit a report to the Adjudicating Authority for appropriate orders. 28. Acquisition, etc., of after acquired property by bankrupt. (1) After a notice is given by the bankrupt under sub-section (2) of section 150, he shall not part with any increase in his income or dispose of any property acquired, without the prior permission of the Adjudicating Authority. (2) If the bankrupt disposes of property before giving the notice under sub-section (2) of section 150, he shall within seven days from such disposal, disclose to the bankruptcy trustee the relevant details of the person to whom the property has been transferred, and shall also provide any other information which may be necessary .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... ently submit his estimate as per sub-regulation (2). (4) In the event an additional registered valuer is appointed under sub-regulation (3), the average of the estimates received from both valuers will be considered to be the value of the assets. 31. Realisation of security interest. (1) A secured creditor, who seeks to realise his security, shall intimate the bankruptcy trustee of the price at which he proposes to realise the secured asset. (2) The bankruptcy trustee shall attempt to identify a buyer willing to purchase the security at a price higher than the price intimated under sub-regulation (1), and the asset shall then be sold to such buyer, if any, at the higher price by the secured creditor. (3) Where the secured asset is realised under sub-regulation (2), the cost of identification of the buyer shall form part of bankruptcy process cost. (4) If the bankruptcy trustee does not identify a buyer under sub-regulation (2), or the person so identified does not buy the secured asset, the secured creditor may realise the secured asset in the manner it deems fit, but at least at the price intimated under sub-regulation (1) and shall bear the cost of identification of the buyer. (5 .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... regulation 11, the bankruptcy trustee shall, within three days from the date of such filing, apply to the Adjudicating Authority for an order to credit to the Insolvency and Bankruptcy Fund formed under the Code, any unclaimed dividends of bankruptcy process or undistributed asset or any other balance amount payable to the creditors, left with him. (2) Without prejudice to any penalty that may be imposed by the Board, the bankruptcy trustee shall be liable to pay interest at the rate of twelve percent per annum on the amount retained by him under sub-regulation (1), if he fails to- (a) apply to the Adjudicating Authority within three days from the date of filing; (b) credit to the Fund within three days from the date of order of the Adjudicating Authority. (3) The bankruptcy trustee shall, when crediting the amount referred to in sub-regulation (1), furnish to the Board, a statement setting forth the following - (a) the names and last known address of the creditors entitled to the unclaimed dividend or undistributed asset or any other balance; (b) the amount of the unclaimed dividend or any other balance for each creditor under (a); (c) the value of the undistributed assets. (4) Th .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 and other applicable provisions of the Code and regulations. (e) I shall make the disclosures in accordance with the code of conduct for insolvency professionals as set out in the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016; (f) I have the following processes in hand: Sl. No. Role as No. of processes on the date of consent 1 Interim Resolution professional 2 Resolution Professional of: a. Corporate debtors b. Personal guarantors or individuals or partnership firms 3 Liquidator of: a. Liquidation Process b. Voluntary Liquidation Process 4 Bankruptcy Trustee 5 Authorised Representative 6 Any other (please state) Date: Place: (Signature of Insolvency Professional) Registration No.….. FORM B Form to appoint proxy (Under regulation 26(2) of the Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019) Full name of the bankrupt: [Insert matter name / application number for the bankruptcy process] Full name of creditor Address Present Permanent Business Identification Number A .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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..... ith agents. (4) The bankruptcy trustee shall prepare terms and conditions of sale, including reserve price, earnest money deposit, pre-bid qualification, and time period for full payment. (5) The reserve price shall be the value of the asset arrived at in accordance with regulation 30 and such valuation shall not be more than six months old: Provided that in the event an auction fails at such price, the bankruptcy trustee may, in consultation with the committee, reduce such reserve price up to seventy-five percent of such value to conduct subsequent auctions: Provided further that in the event of an auction failing in spite of reducing the price up to seventy-five percent, the price may further be reduced with the approval of the committee. (6) The bankruptcy trustee shall provide any assistance, if necessary, for the conduct of due diligence by interested buyers. (7) The bankruptcy trustee shall sell the assets through an electronic auction on an online portal, or on a portal designated by the Board (if any), where the interested buyers can register, bid and receive confirmation of the acceptance of their bid online. (8) The bankruptcy trustee may sell assets through a physical au .....

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Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 - IBBI/2019-20/GN/REG051 - Insolvency and Bankruptcy

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