The Insolvency and Bankruptcy Board of India (IBBI) has come out with a discussion paper on creditor-initiated insolvency resolution process (CIIRP), a new out-of-court mechanism introduced in the recently-passed IBC Amendment Act 2026. The document provides an orderly and efficient procedure for creditors to initiate their own claims against insolvent companies. It also sets out rules for various stakeholders who will be involved in the CIIRP.
The paper has introduced a significant number of new components to conduct the CIIRP, including the mandate to obtain approval of 51% creditors (by value) to initiate the process. The paper also provides a timeline of 150 days – that can be extended for another 45 days with the approval of 66% creditors – for the adjudicating authority to approve the resolution plan. This is shorter than the statutory limit of 330 days provided to approve a resolution plan under the conventional insolvency framework.
