Insolvency Professionals Face Challenges with Authorities During Resolution Processes

Insolvency professionals encounter significant difficulties with statutory authorities and enforcement agencies throughout the insolvency resolution process, according to a survey by the IIIPI. Key issues include dealing with statutory or penal proceedings against Corporate Debtors and handling time-consuming interactions with authorities, which can occupy up to 25% of resolution timelines.

Insolvency professionals face notable difficulties when interacting with statutory authorities and enforcement agencies during the insolvency resolution process, a recent survey reveals.

Conducted by the Indian Institute of Insolvency Professionals of ICAI (IIIPI), the survey included input from around 30 Insolvency Professionals (IPs). The findings, published on Wednesday, highlight several challenges, such as legislative or penal proceedings initiated against Corporate Debtors (CDs) despite the imposition of a moratorium.

IPs often receive summons or notices for civil and criminal cases or actions related to a period before the Corporate Insolvency Resolution Process (CIRP) begins. In dealing with these issues, IPs can spend up to 25% of the timelines mandated by the Insolvency and Bankruptcy Code (IBC), a framework intended to provide swift, market-driven solutions for stressed assets.

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