IBBI Proposes Inclusion of All Real Estate Allottees in Information Memorandum
The Insolvency and Bankruptcy Board of India (IBBI) has suggested that the information memorandum of a company undergoing corporate insolvency resolution should include details of all real estate allottees, even if they haven't filed claims.
InsolvencyReal EstateIbbiInformation MemorandumCorporate DebtorReal EstateNov 17, 2025
In a discussion paper aimed at strengthening safeguards and transparency in the insolvency process, the IBBI has suggested that in real estate projects where the details of allottees are reflected in the books of accounts of the corporate debtor but have not submitted their claims, the resolution plan should provide for the treatment of such allottees. The board has invited comments on its suggestions by December 8.
The paper highlights that in many real estate insolvency cases, several allottees whose details are duly recorded in the corporate debtor's books of account do not file claims within the prescribed time period. As a result, these allottees are excluded from both the information memorandum and the resolution plan. This exclusion causes practical difficulties at the stage of plan implementation when non-filing homebuyers subsequently approach the resolution professional or the successful resolution applicant seeking inclusion, leading to uncertainty, delay, and avoidable litigation.
To enhance transparency and ensure a true and fair representation of the corporate debtor's financial position, the IBBI has proposed to strengthen the disclosure requirements by mandating the inclusion of certain key information items in the information memorandum of debt-ridden companies. These items include details of receivables of the corporate debtor, such as trade receivables, intercorporate receivables, and receivables arising under any contract. The memorandum should also include details of joint development agreements and other similar collaboration or co-development arrangements, including the rights, obligations, and interests of the corporate debtor arising thereunder.
Additionally, the information memorandum should provide details of assets that are under attachment by enforcement agencies, including particulars of the assets attached, the authority under which such attachment has been made, and the status of those proceedings. These measures are intended to provide a comprehensive and transparent view of the corporate debtor's financial and legal status, thereby facilitating a fair and efficient insolvency resolution process.
The IBBI's proposals are part of a broader effort to enhance the effectiveness and transparency of the insolvency resolution process, particularly in the real estate sector, where the interests of homebuyers and other allottees are often at stake. By ensuring that all relevant information is included in the information memorandum, the board aims to prevent delays and disputes, ultimately leading to a more streamlined and fair resolution process for all stakeholders involved.
Frequently Asked Questions
What is an information memorandum in the context of the Insolvency and Bankruptcy Code (IBC)?
An information memorandum under the IBC is a document prepared by the resolution professional that provides detailed information about a corporate debtor to assist potential resolution applicants in formulating a resolution plan.
Why is the IBBI proposing to include all real estate allottees in the information memorandum?
The IBBI is proposing this to ensure transparency and a fair representation of the corporate debtor's financial position, preventing practical difficulties and avoidable litigation during the plan implementation stage.
What are some of the key information items that the IBBI proposes to include in the information memorandum?
The IBBI proposes to include details of receivables, joint development agreements, and assets under attachment by enforcement agencies in the information memorandum.
What is the deadline for submitting comments on the IBBI's proposals?
The deadline for submitting comments on the IBBI's proposals is December 8.
How will these proposals benefit the real estate sector?
These proposals aim to enhance transparency and fairness in the insolvency resolution process, particularly benefiting homebuyers and other real estate allottees by ensuring their interests are considered.
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