IBBI 2025 CIRP Amendments – Interim Finance Observers Allowed

Notification no IBBI/2025-26/GN/REG127; Dated: 26.05.2025

1. Regulatory Snapshot

On 27 May 2025, the Insolvency and Bankruptcy Board of India (IBBI) published the IBBI (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2025. The amendment tweaks several rules in the 2016 CIRP framework, most notably Regulation 18 (Meetings of the Committee) and Regulation 36A (Invitation for Expression of Interest).

2. Why the Changes Matter

1. Enhanced Transparency – Interim-finance providers can see first-hand how the CoC deliberates, reducing information asymmetry.
2. Greater Flexibility – Allowing EOIs for individual assets lets investors cherry-pick viable business units, especially useful where a going-concern sale of the entire debtor is unrealistic.
3. Faster Capital Mobilisation – Visibility for interim financiers encourages timely disbursement, helping keep distressed companies running through the CIRP window.
4. Improved Recovery Odds – Asset-wise deals often fetch better aggregate realisations than one-shot sales, benefiting creditors and preserving jobs.

3. Step-by-Step Operational Flow

• CoC Resolution

1. 1. Passes a simple-majority resolution (≥51 %) to:
   2. Invite interim-finance observers, and/or
   3. Permit the RP to float asset-wise EOIs.

• RP Action

1. 1. For Regulation 18 – Issues meeting invites to listed interim-finance providers, marking them “observer – no vote.”
   2. For Regulation 36A – Publishes Form-G-like EOI notice (print + electronic) specifying whether bids are:

• • • Whole-company,
    • Asset-specific, or
    • Both.

• Gatekeeping & Short-listing – RP vets EOIs for eligibility, prepares provisional list, receives objections, and finalises the list within the timelines already prescribed in Reg. 36A.
• Plan Submission & Evaluation

1. 1. Short-listed applicants receive the Information Memorandum and RFRP.
   2. Plans evaluated under Regulations 38-39; dissenting creditors’ priority now hard-wired into Reg. 38.

4. Compliance Checklist for RPs

• Capture CoC minutes authorising observers/asset-wise EOIs.
• Serve meeting invites to interim-finance providers at least 24 hrs in advance (Reg. 18 timelines unchanged).
• Publish EOI in one English and one regional-language daily plus designated electronic platforms.
• Maintain proof of publication and audit trail of all EOIs received.
• Include dissenting-creditor priority waterfall in every staged-payment plan summary placed before CoC.

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