Insolvency and Bankruptcy Board of India notifies Liquidation Process (Fourth Amendment) Regulations, 2026
Liquidators and committees of creditors: key liquidation decisions require CoC approval and liquidator reporting is consolidated, restricting unilateral liquidator actions
🇮🇳
IBBI
·
Change
On 4 June 2026, the Insolvency and Bankruptcy Board of India notified the IBBI (Liquidation Process) (Fourth Amendment) Regulations, 2026, amending the Liquidation Regulations to place the committee of creditors at the centre of liquidation, carry forward CIRP-verified claims, compress timelines, consolidate reporting, and tighten sale safeguards.
Why it matters
The amendments bind liquidators to obtain committee-of-creditors approval for liquidation-cost, sale-related and not-readily-realisable-asset decisions, reducing liquidator autonomy. Claims verified during the CIRP are carried forward as on the insolvency commencement date and not re-verified, removing a re-verification step and accelerating claim settlement. Sales to related parties or professionals require Adjudicating Authority permission and limits on reserve-price reductions restrict private-sale flexibility, increasing court oversight of value realisation.
Implications
- — Liquidators must obtain committee-of-creditors approval for liquidation-process cost, sale-related decisions and the treatment of not-readily-realisable assets — acting without such approval will contravene the amended regulations.
- — Liquidators must obtain Adjudicating Authority permission before completing sales to related parties or professionals associated with the process and must observe the new cap on reserve-price reductions — sales executed without AA permission or exceeding reduction limits will breach the regulations.
- — Committees of creditors must approve any compromise or arrangement by the prescribed majority and ensure the scheme offers creditors more than the liquidation value as on the insolvency commencement date — schemes that do not meet the threshold cannot be approved.
See full brief
Use 1 free preview to unlock implications, who’s affected, what to watch, and Clarify for this brief.
2 free previews left this month · Resets 1 Jul
Source