IBBI proposes stronger mechanisms for CoC

The Insolvency and Bankruptcy Board of India (IBBI) has in a discussion paper suggested that the committee of creditors (CoC) record its deliberations on the expected recovery for creditors in comparison with the fair value and liquidation value.

- RUCHIKA CHITRAVANSHI

The CoC, IBBI has said, should also record whether the market discovery undertaken during the corporate insolvency resolution process was adequate and wherever applicable, mechanisms such as challenge mechanism or re-invitation of plans were put to use.

These measures are expected to bring more transparency to the Insolvency and Bankruptcy Code (IBC) process and help address the avoidable disputes regarding the robustness of evaluation and decision-making processes of CoC.

The committee, IBBI has proposed, should make a record of its deliberations on the capability and credibility of the resolution applicant, and the certainty of implementation of the resolution plan, including availability of funds.