Current context: IBBI has made changes to the regulation of insolvency resolution process for corporates along with the liquidation process.
a. 2 years
b. 60 days
c. 1 year
d. 5 years
- Now, the Committee of Creditors (CoC) while approving a resolution or deciding liquidation of the corporate debtor, may approve a plan for meeting the liquidation costs.
- The CoC may recommend the sale of the corporate debtor or sale of the business of the corporate debtor in the process of liquidation.
- The IBBI has now specified to complete all the liquidation processes within one year of its commencement i.e. a model timeline for each liquidation task completion.
- The IBBI has also specified the maximum time of 90 days from the order of liquidation for completion of compromise/arrangement.
- If the corporate debtor does not have adequate liquid resources to complete liquidation, financial creditors, who are financial institutions, will have to contribute towards the liquidation cost.
- It also provides that the liquidation process would have to be closed without dissolution of the corporate debtor, where a corporate debtor is sold as a going concern.
Question:
Q.1 As per the IBBI norms, what is the timeline given for completing the liquidation process for corporate debtors?a. 2 years
b. 60 days
c. 1 year
d. 5 years
