Facts for Prelims (FFP)
Source: Economic Times
Context: The Insolvency and Bankruptcy Board of India (IBBI) will create a “common panel” consisting of registered insolvency professionals (IPs).
- This list will be shared in advance with the adjudicating authority.
- For appointment as IRP (interim resolution professional), Liquidator, RP (resolution professional) and BT (bankruptcy trustee).
The purpose of this panel is to allow the authority to choose IPs from the list to oversee various cases of resolution or liquidation.
Previously, the IBBI could only recommend an IP’s name after receiving a reference from the National Company Law Tribunal (NCLT) in a corporate insolvency resolution process (CIRP). This new measure aims to streamline the selection process and improve efficiency in handling insolvency cases.
Who are Insolvency professionals?
They are individuals registered with the Insolvency and Bankruptcy Board of India (IBBI) who specialize in handling insolvency and bankruptcy proceedings. They are responsible for managing the affairs of the debtor, conducting investigations, gathering financial information, coordinating with creditors, and implementing the resolution plan or liquidation process by the Insolvency and Bankruptcy Code (IBC).
About the IBC:
- The IBC was enacted in 2016, replacing a host of laws, to streamline and speed up the resolution process of failed businesses.
- The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency.
