In exercise of the powers conferred by clause t of sub section 1 of section 196 read with section 240 of the Insolvency and Bankruptcy Code,

## Report on the Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Fourth Amendment Regulations, 2025 **1. Executive Summary:** This report analyzes the Insolvency and Bankruptcy Board of India (IBBI) Insolvency Resolution Process for Corporate Persons Fourth Amendment Regulations, 2025, based on the official notification. The amendment, effective upon publication in the Official Gazette, modifies the 2016 regulations. Key changes include provisions regarding interim finance providers attending committee meetings as observers, inviting expressions of interest for resolution plans including asset sales, priority payment for dissenting financial creditors, and revisions to the submission of resolution plans. These amendments aim to refine the insolvency resolution process for corporate entities. **2. Introduction:** This report aims to provide an informative overview of the Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Fourth Amendment Regulations, 2025. This analysis is based solely on the provided government policy text and focuses on understanding the key changes and their potential implications. **3. Policy Overview:** * This report concerns an amendment to the Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Regulations, 2016. * Core Objective(s) (as inferred from the text): To refine and improve the efficiency and fairness of the corporate insolvency resolution process. The amendments suggest a focus on enhanced stakeholder involvement (interim finance providers), flexibility in resolution plan options (asset sales), and protection of dissenting financial creditors. **4. Background and Rationale:** The provided text focuses on amendments to existing regulations, suggesting a need to address perceived gaps or inefficiencies within the original 2016 regulations. Based on the provided text, the amendments likely aim to: * **Enhance transparency and collaboration:** By allowing interim finance providers to attend committee meetings as observers, the amendment potentially aims to provide the committee with a broader perspective and facilitate better informed decision-making. * **Increase flexibility in resolution plans:** By explicitly allowing the invitation of expressions of interest for resolution plans including asset sales, the amendment seeks to expand the options available for resolving corporate insolvency. * **Protect the interests of dissenting financial creditors:** The amendment relating to payment priority for dissenting financial creditors in staged payments suggests an effort to address concerns about fairness and equity in the distribution of proceeds from resolution plans. **5. Key Provisions / Changes:** The following summarizes the key changes introduced by the Fourth Amendment Regulations: * **Regulation 18:** A new sub-regulation 5 is inserted, allowing the committee of creditors to invite providers of interim finance to attend committee meetings as observers without voting rights. *Effect:* This change allows for better information flow and potentially improved decision-making within the committee by including insights from interim finance providers. * **Regulation 36A:** A new sub-regulation 1A is inserted, permitting the resolution professional, with the approval of the committee, to invite expressions of interest for resolution plans involving the corporate debtor as a whole, or for the sale of one or more assets of the corporate debtor, or for both. *Effect:* This expands the scope of potential resolution plans, allowing for more flexible approaches such as asset sales, potentially increasing the likelihood of successful resolution. * **Regulation 36B:** Subregulation 6A is omitted. The text does not provide what this subregulation contained, so it is not possible to discuss the effect of removing it. * **Regulation 38:** Subregulation 1 is amended. * In clause b, punctuation is updated. * A proviso is inserted stating that where a resolution plan provides for payment in stages, the financial creditors who did not vote in favour of the resolution plan shall be paid at least pro rata and in priority over financial creditors who voted in favour of the plan, in each stage. *Effect:* This change protects the interests of dissenting financial creditors by ensuring they receive priority in staged payments, potentially incentivizing more inclusive and equitable resolution plans. * **Regulation 39:** Subregulation 2 and 3 are amended. * In subregulation 2, the words "which comply with the requirements of the Code and regulations made thereunder" are omitted. * In subregulation 2, after the words "along with the details of", the words "noncompliant plans and" are inserted. *Effect:* This suggests a need to more explicitly document and address non-compliant plans in the process, potentially to ensure compliance with regulations. * In subregulation 3, in clause a, after the words "under subregulation 2", the marks and words ", which comply with the requirements of the Code and regulations made thereunder," are inserted. *Effect:* Reinforces the inclusion of only compliant resolution plans. **6. Target Audience and Stakeholders:** Based on the provided text, the primary target audience and stakeholders include: * **Resolution Professionals:** Directly responsible for implementing the changes related to inviting expressions of interest and handling dissenting creditor payments. * **Committee of Creditors:** Involved in approving the invitation of expressions of interest and directing the resolution professional regarding interim finance providers. * **Financial Creditors (Voting and Dissenting):** The amendment directly affects the rights and payment priority of financial creditors, particularly those who did not vote in favor of the resolution plan. * **Providers of Interim Finance:** Given the right to attend committee meetings as observers, this group is now more formally integrated into the resolution process. * **Corporate Debtors:** Ultimately affected by the resolution process and the options available under the amended regulations. **7. Implementation Aspects (Inferred):** * **Responsible Agency:** The Insolvency and Bankruptcy Board of India (IBBI) is the responsible agency for issuing and overseeing these regulations. * **Timelines:** The amendment comes into force on the date of its publication in the Official Gazette (May 26, 2025, according to the provided text). * **Procedures:** The implementation of the amendments will require Resolution Professionals to adjust their practices regarding inviting expressions of interest, managing committee meetings with interim finance providers, and prioritizing payments to dissenting financial creditors. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these specific changes include: * **Increased transparency and stakeholder engagement:** Enhanced involvement of interim finance providers. * **Greater flexibility in resolution strategies:** Broader options for resolution, including asset sales, potentially leading to more successful resolutions. * **Improved fairness and protection for dissenting creditors:** The priority payment for dissenting creditors in staged payments aims to address concerns about equity and fairness. * **Enhanced compliance:** Greater emphasis on compliance and better processes for reporting non-compliant plans. **9. Conclusion:** The Insolvency and Bankruptcy Board of India Insolvency Resolution Process for Corporate Persons Fourth Amendment Regulations, 2025 represent a refinement of the existing insolvency resolution framework. The key amendments focus on enhancing transparency, flexibility, and fairness within the process. While the full impact remains to be seen, these changes are likely to influence the behavior of Resolution Professionals, Committees of Creditors, and Financial Creditors, ultimately contributing to a more efficient and equitable corporate insolvency resolution process.

Key Entities Referenced