Who is an Interim Resolution Professional?

Interim Resolution Professional means an insolvency professional appointed to

conduct the corporate insolvency process and includes a ‘resolution
professional’ as per Section 5(27) of Insolvency Code, 2016. He should be
enrolled under section 206 of Insolvency Code, 2016 with an insolvency
professional agency as its member and registered with the Board (IBBI) as an
insolvency professional under section 207 of insolvency Code, 2016- section
3(19) of Insolvency Code, 2016

Duties of the interim professional.

The interim resolution professional, may, from the insolvency commencement
date, require the following persons to report to, take instructions from and
extend all cooperation to him, in all matters arising from and in connection with
the terms of their engagement with the corporate debtor:
(a) the board of directors, promoters and the members and partners of the
corporate debtor, the personnel, the officers and managers, and any other person
associated with the management of the business and operations of the corporate
debtor;
(b) the auditors and other professional advisors, if any, of the corporate debtor;
and
(c) the financial institutions maintaining the accounts of the corporate debtor.
In addition to above, the interim resolution professional shall have the
authority to access the books of account, records and other relevant
documents and information of the corporate debtor held with:
(a) any depositories of securities;
(b) professional advisors of the corporate debtor;
(c) information utilities;
(d) any other registry that records the ownership of assets;
(e) members, promoters, partners, board of directors and joint venture partners
of the corporate debtor; and
(f) contractual counterparties of the corporate debtor. The Interim Insolvency
Professional shall also appoint two registered valuers to calculate the liquidation
value of the corporate debtor in accordance with Regulations.
Insolvency Code has specifically ensured to mention about a professional who
is supposed to be enrolled with the insolvency agency. The idea is similar to
appointing a receiver in the matters of Banks and NBFCs to attend the process
of insolvency or attachment of property in case of Banks & NBFCs. It is
important to have a professional to overlook into the cases of insolvency while
the CIRP is going on to maintain fairness in the process and parties do not feel
cheated.
he interim resolution professional shall perform the following duties, namely:—

(a) collect all information relating to the assets, finances and operations of the
corporate debtor for determining the financial position of the corporate debtor,
including information relating to—

(i) business operations for the previous two years;

(ii) financial and operational payments for the previous two years;

(iii) list of assets and liabilities as on the initiation date; and

(iv) such other matters as may be specified;

(b) receive and collate all the claims submitted by creditors to him, pursuant to
the public announcement made under sections 13 and 15;

(c) constitute a committee of creditors;

(d) monitor the assets of the corporate debtor and manage its operations until a
resolution professional is appointed by the committee of creditors;

(e) file information collected with the information utility, if necessary; and

(f) take control and custody of any asset over which the corporate debtor has
ownership rights as recorded in the balance sheet of the corporate debtor, or
with information utility or the depository of securities or any other registry that
records the ownership of assets including—

(i) assets over which the corporate debtor has ownership rights which may be
located in a foreign country;

(ii) assets that may or may not be in possession of the corporate debtor;
(iii) tangible assets, whether movable or immovable;

(iv) intangible assets including intellectual property;

(v) securities including shares held in any subsidiary of the corporate debtor,
financial instruments, insurance policies;

(vi) assets subject to the determination of ownership by a court or authority;

(g) to perform such other duties as may be specified by the Board.

Explanation.—For the purposes of this sub-section section, the term “assets”

shall not include the following, namely:—

(a) assets owned by a third party in possession of the corporate debtor held
under trust or under contractual arrangements including bailment;

(b) assets of any Indian or foreign subsidiary of the corporate debtor; and

(c) such other assets as may be notified by the Central Government in

consultation with any financial sector regulator.

DUTIES:
1. Make public announcement within 3 days of his appointment about
initiation of Corporate Insolvency Resolution Process (CIRP) and call for
claims from creditors;
2. Manage the operation of the Corporate Debtor as a going concern and
protect and preserve the value of property;
3. Take control and custody of assets over which the Corporate Debtor has
ownership
4. Receive and collate claims from creditors;
5. Constitute Committee of Creditors in maximum 30 days from his
appointment;
6. File report certifying the constitution of Committee of Creditors (CoC)
to Adjudicating Authority (AA);
7. Sending Notice and convene 1st meeting of CoC;
8. File information collected with Information Utility;
 POWERS OF IRP

 Powers of Board of Directors

• Suspension of Board
• Officers and others report to IRP / RP
• To act and sign for and on behalf of Corporate Debtor
 Asset Protection and maximise value
• Take control of assets
• Security, insurance etc.
 Claims - admission and rejection
• Bifurcate admitted claims of creditors – financial, operational and
Related Parties
 Preparation of Information Memorandum (IM)
 Running day to day management
 Regulatory compliances
 Constitute Committee of Creditors (COC)
 Convene meetings of COC
 Scrutinise past two years financials
 Supply IM after undertaking of confidentiality obtained
 Receive, Verify and approve/reject Resolution Plans
 Raise interim finance
 Apply to NCLT for non-co-operation; avoidance of preferential
transactions

 Management of Corporate Debtor

• Committee says - "The interim RP is given the power to do all the
things that are necessary for the entity to continue as a going concern.
This includes taking over the management of the business and the assets
of the entity, appointing accountants and legal staff to verify liabilities
and assets and issue legal notices if required. The interim RP has the
power to raise fresh finances to keep the entity as a going concern. The
term of the financing is restricted to the period till the creditors
committee is formed. The cost of financing actions of the interim RP
will be considered as the cost of the IRP.
 " Information Memorandum
• Committee says “where the IRP has been triggered by a creditor, the
Adjudicator will give the interim RP the responsibility of collecting the
information about the entity that is equivalent to the information that
would be present in a debtor triggered IRP. This involves getting access
to the information, and filing it in a registered IU if required. If the
debtor does not respond to the requests for the information, the interim
RP can file a complaint with the Adjudicating Authority. ”