Assignment of NRRAs under Regulation 37A
On 13 th November 2020, Insolvency and Bankruptcy Board of India (“ IBBI ”) issued the Insolvency and Bankruptcy Board of India (Liquidation Process) (Fourth Amendment) Regulations, 2020. One of the major purposes, for which this amendment was brought in was to ease the process of sale of liquidation assets. As we all are aware that realization of some assets (such as continent claims, disputed receivables, disputed assets, refund from government etc.) have been an uphill task for any liquidator. Since realization of these assets may take quite some time, they are referred in these regulations as ‘Not Readily Realizable Asset’ or NRRA, which term has been introduced by inserting Regulation 37A. There is always a sense of urgency in a liquidation process and liquidator tries to ensure that the creditors of corporate debtors are able to realize maximum value of the assets of corporate debtor. However, these NRRAs create a sort of hurdle in this urgent process. Regul...