Why in news?
• The Insolvency and Bankruptcy Board of India (IBBI) has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) on 29th March 2020.
About:
• It provides that the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for any activity that could not be completed due to the lockdown, in relation to a corporate insolvency resolution process.
• Corporate Insolvency Resolution Process (CIRP) is a recovery mechanism for creditors. If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP.
• The CIRP may include necessary steps to revive the company such as raising fresh funds for operation, looking for new buyer to sell the company as going concern.
• CIRP in a case under Insolvency and Bankruptcy Code, 2016 (IBC) needs to be completed in 330 days including time taken for litigation.
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