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IBC Ordinance June 2018


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Key amendments to IBC pursuant to ordinance dated 6th June, 2018

Published in: Business
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IBC Ordinance June 2018

  1. 1. Confidential and Proprietary IBC Ordinance dated 6th June 2018 1
  2. 2. 2 Key amendments notified by the ordinance • Definition of ‘related party’ of an individual now widened to include – Relative of individual or relative of the spouse of individual – Any company/person who acts or accustomed to act on advice of the individual • MSME promoters can bid, MSME as defined in MSME Development Act, 2006; it doesn’t refer to 250 Cr revenue criteria • Financial creditors: now any person on behalf of financial creditor can also file the application • Operational creditors: norms to admit the application by operational creditors in by relaxing some certificates required from them • Real estate projects: buyers of real estate project to be considered as financial creditors (no clarity about secured or unsecured) • In case of corporate applicant, special resolution passed by the shareholders or votes of at least 3/4th of total partners required • Relaxation in NPA related 29 (A) criteria for financial bidders if default was before submission of resolution plan
  3. 3. 3 Key amendments related to rquired voting share of CoC • Required voting share of CoC changed to 66% from earlier rule of 75% for following decisions: – Approval resolution plan and decision of liquidation – Extension of CIRP period from 180 days to 270 days – appointment of IRP as RP, replacement of RP – Routine decisions as mentioned under section 28(1) • The Concept of moratorium shall not apply to contracts of guarantee provided to a corporate debtor • Section 21(8) decisions need only 51% as opposed to 75%; this section includes some routine decisions • Withdrawal of application filed for CIRP with 90 % votes of CoC – doesn’t clarify at which stage of the process withdrawal allowed • The IRP/RP shall now be responsible for complying with the requirements under any law for the time being in force on corporate debtor • RP can proxy vote for large pool of financial creditors if he has obtained prior instructions to do from each of those fin creditors
  4. 4. Confidential and Proprietary Thank You! 4