IBBI Proposes Changes To Record CoC Decisions & Require Going Concern Review

The Insolvency and Bankruptcy Board of India (IBBI) has proposed that the committee of creditors (CoC) record its deliberations on expected recovery for creditors against the fair value and liquidation value of the company. It has suggested that the CoC document whether market discovery during the corporate insolvency resolution process was adequate and whether tools such as challenge mechanisms or re-invitation of plans were used.

The regulator has also proposed that the CoC record its assessment of the capability and credibility of the resolution applicant and the certainty of implementation of the resolution plan, including the availability of funds. IBBI has proposed making it mandatory for the CoC to place a structured Going Concern Assessment Report at its first meeting. The report will examine financial viability, income, expenditure, cash flows, working capital needs, and risks linked to continuation or suspension of operations.