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The Insolvency Resolution Process for Corporate Persons Fourth Amendment regulations, 2025, were notified by the Insolvency and Bankruptcy Board of India on May 26, according to a recent release. These amendments to the corporate insolvency regulations are designed to streamline procedures, safeguard the interests of creditors, and foster increased investor involvement in resolution processes.
A key change introduced allows resolution professionals, with the approval of the committee of creditors, to invite expressions of interest not only for the entire corporate debtor but also for individual assets or a combination thereof. According to the IBBI, enabling concurrent invitations for expressions of interest is expected to shorten the resolution process, prevent the loss of value in profitable parts of the distressed company, and attract a wider range of investors.
Furthermore, the amended regulations introduce changes to the payment structure for resolution plans that are implemented in phases. Under these revisions, financial creditors who did not support the resolution plan will now be paid at least proportionally and before those who voted in favor of it.
The Board said this approach balances the legitimate rights of dissenting creditors with the practical constraints of phased implementation. In another notable amendment, the CoC has been empowered to direct resolution professionals to invite the interim finance providers to attend its meetings as observers without voting rights.
As per IBBI, this measure is aimed to provide interim finance providers with a better understanding of the corporate debtor's operational status, thereby enabling them to make well-informed decisions regarding funding requirements. This provision ensures that the CoC has access to comprehensive information for decision-making, which may lead to more informed choices and ultimately contribute to a more transparent and effective resolution process, IBBI added
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