IBBI mulls splitting resolution professionals’ role to simplify large insolvency cases

The Insolvency and Bankruptcy Board of India (IBBI) is contemplating a significant change in the framework of handling large insolvency cases. The proposal under review aims to relieve resolution professionals (RPs) from the operational responsibilities of managing distressed companies. This shift is intended to streamline the insolvency process, allowing RPs to focus on their core task of resolution plan formulation and creditor negotiation. Currently, RPs juggle dual roles, both steering the company's day-to-day operations and working towards a resolution. By splitting these responsibilities, the IBBI hopes to enhance efficiency and effectiveness in managing complex insolvency cases. This move could potentially attract more specialized professionals to oversee company operations, ensuring that the business remains viable during the insolvency proceedings. Stakeholders and industry experts are keenly observing this development, as it could redefine the landscape of insolvency management in India. If implemented, the proposal might lead to faster resolutions and better outcomes for creditors and distressed companies alike. The IBBI's decision will likely have far-reaching implications for the future of corporate insolvency in the country.

— Authored by Next24 Live