The Insolvency and Bankruptcy Board of India (IBBI) has proposed tighter safeguards in the insolvency resolution process for personal guarantors to corporate debtors, including barring related parties from voting on repayment plans, mandatory valuation of guarantors’ assets and scrutiny of transactions that could have reduced recoveries for creditors.
The proposals are aimed at bringing the insolvency framework for personal guarantors closer to the safeguards available to creditors in the corporate insolvency resolution process (CIRP). The IBBI said a review of the existing framework showed that several safeguards available in corporate insolvency proceedings had no equivalent in the resolution process for personal…