Insolvency: Homebuyers’ representatives get greater responsibility
NEW DELHI: In a bid to give more say to the home buyers in the insolvency bankruptcy code (IBC), the Insolvency and Bankruptcy Board of India (IBBI) has enhanced the role and responsibilities of their Authorised Representatives(AR) in the resolution process.
As per the latest changes made in the corporate insolvency regulation that have been made effective from September 18, the AR will now serve as a bridge between the Committee of Creditors (CoCs) and homebuyers.
Their role is to address the homebuyers’ information gaps, provide procedural clarity, and keep them updated. Previously, homebuyers faced a significant challenge as financial creditors under the IBC due to a lack of comprehensive information about the CoC. However, a recent legal mandate now requires the AR to assist homebuyers in understanding CoC discussions and considerations, addressing this issue.
“Some of the duties of the AR are (i) to review contents of minutes prepared by the RP to ensure correctness and completeness, (ii) to provide assistance to the creditors in evaluating resolution plan, (iii) to regularly update the creditors in a class on the progress of the CIRP, (iv) to assist in modifications of the resolution plan on behalf of a class of creditors represented by him, etc,” an IBBI statement said. Meanwhile, fees of the AR have been enhanced in line with the increased role. A procedure for the replacement of AR has been introduced.