Insolvency Resolution Process Costs

“Insolvency resolution process costs” under Section 5(13)(e) shall mean-
                        (a) amounts due to suppliers of essential goods and services under Regulation 32;
(aa) fee payable to authorised representative under sub-regulation (8) of regulation 16A;

(ab) out of pocket expenses of authorised representative for discharge of his functions under 37[section 25A];

                        (b) amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under section 14(1)(d);

                        (c) expenses incurred on or by the interim resolution professional to the extent ratified under Regulation 33;

                        (d) expenses incurred on or by the resolution professional fixed under Regulation 34; and

                        (e) other costs directly relating to the corporate insolvency resolution process and approved by the committee.
VL Note : –

The essential goods and services referred to in section 14(2) shall mean-
(1) electricity;

(2) water;

(3) telecommunication services; and

(4) information technology services,

to the extent these are not a direct input to the output produced or supplied by the corporate debtor.

Illustration- Water supplied to a corporate debtor will be essential supplies for drinking and sanitation purposes, and not for generation of hydro-electricity.
VL Note : –

(1) The applicant shall fix the expenses to be incurred on or by the interim resolution professional. (2) The Adjudicating Authority shall fix expenses where the applicant has not fixed expenses under sub-regulation (1). (3) The applicant shall bear the expenses which shall be reimbursed by the committee to the extent it ratifies. (4) The amount of expenses ratified by the committee shall be treated as insolvency resolution process costs. Explanation. – For the purposes of this regulation, “expenses” include the fee to be paid to the interim resolution professional, fee to be paid to insolvency professional entity, if any, and fee to be paid to professionals, if any, and other expenses to be incurred by the interim resolution professional.

VL Note : –

The committee shall fix the expenses to be incurred on or by the resolution professional and the expenses shall constitute insolvency resolution process costs.

Explanation. – For the purposes of this regulation, “expenses” include the fee to be paid to the resolution professional, fee to be paid to insolvency professional entity, if any, and fee to be paid to professionals, if any, and other expenses to be incurred by the resolution professional.
VL Note : –

The interim resolution professional or the resolution professional, as the case may be, shall disclose item wise insolvency resolution process costs in such manner as may be required by the Board.