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Insolvency resolution professionals will now be required to assess the fair value and liquidation value of the entity undergoing insolvency proceedings, with the latest set of amendments to the regulations.
The Insolvency and Bankruptcy Board of India (IBBI) has amended the norms pertaining to insolvency resolution process for corporate persons.
Under the revised framework, the resolution plan -- approved by the committee of creditors -- should be submitted to the adjudicating authority "at least 15 days before the expiry of the maximum period permitted for the completion of the corporate insolvency resolution process".
An official release today said the norms have been amended wherein the resolution professional should appoint two registered valuers to determine the fair value and the liquidation value of the corporate debtor.
"After the receipt of resolution plans, the resolution professional shall provide the fair value and the liquidation value to each member of the committee of creditors in electronic form, on receiving a confidentiality undertaking," it said.
Chander Sawhney, who is Partner (Valuations) at advisory firm Corporate Professionals, said the amendment to have both fair value and liquidation value is in line with the settled principles of valuation.