IBBI Guidelines for the members of committee of creditors 

On 06 August 2024, the Insolvency and Bankruptcy Board of India (IBBI) issued ‘Guidelines for Committee of Creditors’ (Guidelines) (available here). These Guidelines outline nine considerations for the Committee of Creditors (CoC) to follow when handling insolvency cases. The aim of Guidelines is timely resolution of insolvency of the corporate debtor and its asset value maximization.  

These Guidelines are effective from 06 August 2024. As per the Guidelines, the members of the CoC are required to adhere to the following:

1. Objectivity and Integrity 

1. Follow the Code and regulations precisely.  

2. Maintain integrity in all roles. 

3. Ensure objectivity in decisions.  

4. Share relevant information on transactions, guarantees, and claims with the CoC/Insolvency Professional (IP). 

2. Independence and impartiality 

1. Immediately disclose to the CoC/ IP of any existing or potential conflict of interest. 

3. Professional competence and participation 

1. Stay current with the Code, rules, regulations, and assigned responsibilities. 

2. Appoint a well-authorized representative with the mandate to actively participate in meetings and secure approvals if needed. 

3. Engage actively and constructively in CoC discussions and decision-making. 

4. Co-operation, supervision and timelines 

1. Supervise and facilitate the IP in discharging his duties. 

2. Ensure expeditious appointment of various professionals within the timelines. 

3. Resolve any inter-se disputes or conflict in opinion between the members through dialogue and co-ordination in relation to the claims or otherwise.  

5. Confidentiality 

1. Maintain the confidentiality of information at all points in time. 

6. Costs 

1. Take necessary measures to keep the Insolvency Resolution Cost (IRP Cost) reasonable.  

2. Decide on all expenses of IP including going concern expenses of the Corporate Debtor. 

3. Immediately fix the liquidator’s fee. 

7. Meeting of the CoC 

1. Monitor activities of the IP and seek rationale of the decisions taken by him/her.  

2. Recommend for inclusion of belated claims and their treatment in the resolution plan. 

3. Participate in the presentation of valuation methodologies made by the registered valuers. 

4. Ensure regular CoC meetings are held. 

8. Sharing of information 

1. Provide the latest financial statements, relevant audit extracts (stock, transaction, forensic), and other pertinent information to the IP. 

2. Request details of all litigation involving the corporate debtor from the IP and suggest actions to protect the corporate debtor’s interests. 

9. Feasibility and viability of corporate debtor 

1. Review and assess the information memorandum prepared by the IP and offer insights.  

2. Contribute to the preparation of marketing strategy by IP and may take measures for marketing of the assets of corporate debtor. 

The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident, or any other cause.