Insolvency Code 2018 an effort to emancipate Homebuyers at Par with other Financial Creditors
Insolvency and Bankruptcy Code is a nightmare to deal with for all real estate residential & commercial owners. These scary terminologies, when attached with most Important Investment of one’s life, makes the situation even worse.
Though Indian consumers were going through a bad phase, however with the latest ordinance amending the Insolvency law has given much relief to homebuyers providing them with a status of the financial creditor. Also under the Insolvency and Bankruptcy code ibbi.gov.in amendment 2018, homebuyers will get a due representation in COC committee of creditors with a say on calls to resolution proposals.
This amendment is a strong support in the Modi era to all retail Investors at Jaypee Infratech, Unitech, Amrapali, and Parsvnath Developers, for who proceedings have been take ahead.
This amendment has empowered them with a status to be treated at par with Banks which means Banks have to share their first recovery claim with homebuyers who were considered to be mere consumers under claim liquidation waterfall before.
Also, this amendment comes with absolute clarity on procedural requirements for creditors under the direct supervision of IRP (Interim Resolution Professional) where he would be required to submit a recommendation whether the corporate debtor was involved in preferential, undervalued, extortionate or fraudulent transactions as well as make a determination of any such activity with a release.
The Insolvency and Bankruptcy Code lays huge responsibility on Interim Resolution Professional. The Insolvency professional once appointed becomes the de facto management and carries the authority equivalent to the CEO of the firm under review (Corporate Insolvency Resolution Process) CIRP. Insolvency Resolution Professional shall issue an Information Memorandum, the evaluation matrix and Request for Resolutions Plans (RFRP) and allows at least 30 days for the submission from Committee of Creditors COC. The work and responsibility involved in being an IRP is high”
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