The Insolvency and Bankruptcy Board of India (IBBI) has amended its regulations to allow the part sale of assets of an entity undergoing insolvency resolution — to fetch better value for distressed assets and maximise recovery.

The Committee of Creditors (CoC) can now examine whether a compromise or an arrangement can be explored for a corporate debtor during the liquidation period. The Insolvency and Bankruptcy Board of India (IBBI) has amended the regulations with the “objective to maximise value in resolution” and they came into effect from September 16.

It has allowed the marketing of assets in insolvency cases where the company’s book value of assets exceeds Rs 100 crore. The regulator has permitted a resolution professional (RP) and the CoC to look for the sale of one or more assets of the corporate debtor concerned in cases where there are no resolution plans for the whole business.

The amended regulations will enable a “resolution plan to include sale of one or more assets of CD (Corporate Debtor) to one or more successful resolution applicants submitting resolution plans for such assets and providing for appropriate treatment of the remaining assets”.

With the amendments to IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, marketing of assets of a corporate debtor can be done that will help in wider dissemination of information to a wider and targeted audience of potential resolution applicants.

“The amendment also enables a longer time for the asset in the market,” the IBBI statement said. “The amendments will ensure that better quality information about the insolvent company and its assets is available to the market, including prospective resolution applicants, in a timely manner,” Gaurav Gupte, partner, Cyril Amarchand Mangaldas, said.