The Insolvency and Bankruptcy Board of India ( IBBI ) extended the time for filing Forms to monitor liquidation processes under the Insolvency and Bankruptcy Code, 2016, Vide Circular No. IBBI/LIQ/73/2024 dated 28.06.2024. The liquidators were directed to file forms relating to the liquidation process latest by 30.09.2024.
The liquidator is the key individual responsible for managing and overseeing the liquidation process. In both voluntary and compulsory liquidation, a licensed insolvency professional is appointed to act as a liquidator.
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Creditors have the right to monitor the liquidation process, especially in compulsory liquidations where creditors’ claims are prioritized. Creditors often form a creditors’ committee, which provides oversight and can request updates from the liquidator on the progress of asset realization and settlement of claims.
Shareholders: In voluntary liquidation, shareholders monitor the process as they will receive the remaining funds after creditors are paid. They typically receive updates from the liquidator about the distribution of assets.
Regulatory bodies like the Ministry of Corporate Affairs (MCA) in India, or similar bodies in other jurisdictions, monitor the compliance of companies with liquidation procedures. They oversee whether companies are filing required documents, such as declarations of solvency or final reports.
These bodies also ensure that creditors, employees, and other stakeholders are treated fairly during the liquidation process.
Monitoring ensures that there is no mismanagement, fraud, or preferential treatment during the liquidation process. Insolvency professionals are bound by ethical guidelines, and the IBBI in India, or similar bodies in other countries, can investigate any misconduct.
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The representations have been received from the liquidators and Insolvency Professional Agencies for extending the date citing the technicalities and issues involved in the submission of the forms. Considering the above-mentioned representations and difficulties faced by the liquidator, the IBBI extended the last date of submission of the forms till 30.11.2024.
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