The guidelines asks creditors to resolve any inter-se disputes between the members, particularly in relation to claims, preferably, through dialogue, or other non-adversarial means and avoid litigation.
“The CoC has to also regularly monitor the activities of the insolvency professional (IP) and seek rationale of decisions/actions taken by him. CoC has to also carefully review and assess the information memorandum prepared by the IP and offer additional insights,” the guidelines say.
The guidelines issued three years after a draft was release in August 2021 is an attempt by the regulator to plug loopholes in the bankruptcy process.
It also asks creditors to contribute to the preparation of the marketing of the assets of the corporate debtor, if necessary, a task so far left only to the IP.
The CoC has also been directed to proactively share the latest financial statements, relevant extract from the audits of the corporate debtor, conducted by the creditors such as stock audit, transaction audit, forensic audit, etc. and other relevant information available, with the IP to enable efficient conduct of the process.”CoC has to seek details of all litigation filed against or by the corporate debtor from IP and recommend necessary actions to safeguard the interest of the corporate debtor,” the guidelines said.Lenders also have to disclose to the CoC/IP the details of any existing or potential conflict of interest arising due to pecuniary, personal or professional relationship with any stakeholder, immediately on becoming aware of it, the guidelines said.