No More Hidden Deals: IBBI Mandates Disclosure of Avoidance Transactions in Resolution Plans

The Insolvency and Bankruptcy Board of India (IBBI) has mandated the disclosure of avoidance transactions in resolution plans, promoting "no more hidden deals." This significant regulatory change aims to enhance transparency and accountability in the corporate insolvency resolution process (CIRP). Avoidance transactions (like preferential, undervalued, or fraudulent transactions) made by the corporate debtor before insolvency can be reversed. By requiring their disclosure, IBBI ensures that potential assets recovered from such transactions are fully accounted for, benefiting creditors and preventing illicit dealings during the resolution process.