Establishment of Insolvency and Bankruptcy Board of India
The Insolvency and Bankruptcy Board of India was established on October 1, 2016 in accordance with the provisions of The Insolvency and Bankruptcy Code, 2016.
The Insolvency and Bankruptcy Board of India (IBBI) is the regulator for overseeing insolvency proceedings and entities like Insolvency Professional Agencies (IPA), Insolvency Professionals (IP) and Information Utilities (IU) in India
Key aspects of the Insolvency and Bankruptcy Code
IBC proposes a paradigm shift from the existing ‘Debtor in possession’ to a ‘Creditor in control’ regime.
IBC aims at consolidating all existing insolvency related laws as well as amending multiple legislation including the Companies Act.
The code would have an overriding effect on all other laws relating to Insolvency & Bankruptcy.
The code aims to resolve insolvencies in a strict time-bound manner – the evaluation and viability determination must be completed within 180 days.
Moratorium period of 180 days (extendable upto 270 days) for the Company. Insolvency profressional to take over the managemnent of the Company.
Clearly defined ‘order of priority’ or the waterfall mechanism.
The waterfall to render government dues junior to most others is significant.
Antecedent transactions can be investigated and in case of any illegal diversion of assets personal contribution can be ordered by court.
Introduce a qualified insolvency professional (IP) as intermediaries to oversee the process
Establishment of Insolvency and Bankruptcy board as an independent body for the administration and governance of Insolvency & bankruptcy Law; and Information Utilities as a depository of financial information.