The Insolvency and Bankruptcy Board India (IBBI) notified on 13th September 2022 the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2022.
Salient features of the Amendments:
The salient features of the amendments effected by the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2022 are as under:
The fee of the interim resolution professional or the resolution professional, appointed on or after 1 st October 2022 shall be decided by the applicant or committee in accordance with the said amendment regulations.
An insolvency professional shall be paid a minimum fixed fee in the range of one lakh rupees to five lakh rupees, per month, depending on the quantum of claims admitted, as specified under Table-1 of Schedule II of the said amendment regulations. However, the applicant or committee may decide to fix a higher amount of fees than the said minimum fixed fee, after taking into consideration market factors such as the size and scale of business operations of the corporate debtor, the business sector in which the corporate debtor operates, level of operating economic activity of corporate debtor and complexity related to process.
For the resolution plan approved by the committee on or after 1st October 2022, the committee may decide to pay, after approval of such resolution plan by the Adjudicating Authority on commencement of payment to creditors by the resolution applicant, a performance-linked incentive fee, not exceeding a total of five crores of rupees; a. for timely submission of resolution plan to the Adjudicating Authority, as specified under Table-2 of Schedule-II to the said amendment regulations, and/or b. for value maximisation, at the rate of one per cent of the amount by which the realisable value is higher than the liquidation value, or c. other than a. or b. above, as the committee may deem necessary.
The fee under amendment regulation may be paid from the funds, available with the corporate debtor, contributed by the applicant or members of the committee and/or raised by way of interim finance and the same shall be included in the insolvency resolution process cost.
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