A liquidator can claim fees only on the basis of the amount of work they have done during the liquidation process of a company, be it in terms of the amount realised or distributed, the Insolvency and Bankruptcy Board of India (IBBI).
When a company goes into liquidation under the Insolvency and Bankruptcy Code (IBC), generally, the committee of creditors (CoC) appoints a liquidator and decides on a fixed fee to be paid for their services.
However, in the absence of a fixed fee, IBBI regulations stipulate the liquidator’s fee as a percentage of the amount realised and distributed through the liquidation process.
To address uncertainties in such cases involving multiple liquidators, the IBBI has amended the liquidation process regulations.
The decision was made as situations arose where the liquidator had to be replaced as he fell sick, passed away or resigned midway during the process, said a person aware of the matter.