The Insolvency and Bankruptcy Board of India (IBBI) has mandated resolution applicants to furnish performance security in corporate insolvency process. This has been stipulated to ensure that corporate resolution plans, once approved, are not withdrawn on a whim.
The idea is to encourage only those resolution applicants who are genuine, credible, and capable of submitting and implementing the resolution plans. Performance security would need to be furnished only in those cases where the resolution plan has been approved by the Committee of Creditors (CoCs).
For mandating performance security, insolvency regulator IBBI has now amended the existing Corporate Insolvency regulations. The amended regulations now specify that the CoC will have…
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