Four changes proposed
The proposals cover four areas: voting rights of related-party creditors, scrutiny of avoidance transactions during the resolution stage, mandatory valuation of the personal guarantor’s assets, and fuller recording of creditors’ objections and reasons while considering a repayment plan.
Under the first proposal, a creditor that is a related party of the guarantor would not be allowed to vote on the repayment plan. At present, an associate is barred from voting in such cases, but the IBBI said the definition of associate is narrower than that of related party. According to the paper, this gap can “allow entities acting under the guarantor’s influence to participate in voting”.
The second proposal requires…