This article critically examines the resolution professional’s success fee under Regulation 34-B of the CIRP Regulations, 2016, analysing its impact on creditor recoveries, impartiality, proportionality and insolvency law safeguards.
Introduction
The declared object of the Insolvency and Bankruptcy Code, 2016 is the resolution of a corporate debtor for the maximisation of value for the benefit of all its stakeholders. It is against that object that a provision introduced by the Insolvency and Bankruptcy Board of India in 2022 must be tested. Regulation 34-B(4), Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) permits the Committee of Creditors,…