Discussion Paper on Remuneration of an Insolvency Professional
This paper deals with issue of fee of an insolvency professional (IP) acting as interim resolution professional (IRP)/ resolution professional (RP) in corporate insolvency resolution process (CIRP) who have significant role in ensuring timely completion of the CIRP in addition to the indispensable role played by each stakeholder including the Adjudicating Authority (AA), the committee of creditors (CoC), resolution applicants, etc. To this end, the paper suggests changes to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations).
Background
2.The Board has been receiving several directions from the AA, requiring it to fix of fee payable to IRP/RP in cases inter-alia involving disputes between IRP and applicant regarding fee, and disputes between RP and CoC regarding fee/ exorbitant fees claimed as interim resolution process cost (IRPC). The Board has dealt with the references from the AA in the matters on facts and circumstances of each case.
3. In majority of such cases, the Board has constituted Expert Committees comprising of 3 members including two market experts and one officer of IBBI in order to ensure necessary compliance with directions of AA for each case. The respective committees considered the facts of the particular case viz. nature and state of affairs of business activity in which Corporate Debtor (CD) is engaged, and in general noted the volume of activities carried out by IP, apart from the information about taxable remuneration of the highest paid unrelated employee of CD, wherever available. Accordingly, the quantum of fees and expenses so recommended as reasonable, by the committees were considered, and thereafter IBBI submitted the same to AA.
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