IBBI lays down Guidelines for Appointment of Insolvency Professionals as Interim Resolution Professionals or Liquidators [Read Guidelines]

The Insolvency and Bankruptcy Board of India ( IBBI ) has prescribed the guidelines for the appointment of Insolvency Professionals as Interim Resolution Professionals or Liquidators.

As per Section 16(3)(a) of the Insolvency and Bankruptcy Code, 2016 requires the Adjudicating Authority (AA) to make a reference to the Insolvency and Bankruptcy Board of India for recommendation of an insolvency professional (IP) who may act as an interim resolution professional (IRP) in case an operational creditor has made an application for corporate insolvency resolution process (CIRP) and has not proposed an IRP.

The Board, within ten days of the receipt of the reference from the AA, is required under section 16(4) of the Code to recommend the name of an IP to AA against whom no disciplinary proceedings are pending. 2. Section 34(4) of the Code requires the AA to replace the resolution professional, if (a) the resolution plan submitted by the resolution professional under section 30 was rejected for failure to meet the requirements mentioned in sub-section (2) of section 30; or (b) the Board recommends the replacement of a resolution professional to the AA for reasons to be recorded in writing. In such cases, the AA may direct the Board under section 34(5) of the Code to propose the name of another IP to be appointed as a liquidator. The Board is required under section 34(6) to propose the name of another IP within ten days of the direction issued by the AA.