If the liquidators’ fee is not fixed under sub-regulation (1) and (1A), clause (b) of sub-regulation (2) of Regulation 4 provides that the liquidator shall be entitled to a fee as a percentage of the amount realised net of other liquidation costs, and of the amount distributed, for the balance period of liquidation.
This circular clarifies the meaning of:
1. Amount realised – shall mean the amount realised from assets other than liquid assets such as cash and bank balance including term deposit, mutual fund, and quoted share available at the start of the process after exploring compromise and arrangement, if any.
2. The other liquidation cost in regulation 4(2)(b) shall mean liquidation cost paid in priority under section 53(1)(a), after excluding the liquidator’s fee.
3. Amount distributed to stakeholders shall mean distributions made to the stakeholders, after deducting CIRP and liquidation cost.
4. Amount of Realisation /Distribution shall mean cumulative value of amount realised/ distributed which is to be bifurcated in various slabs as per column 1 and thereafter the same is to be bifurcated into realisation/ distribution in various periods of time and then corresponding fee rate from the table is to be taken.
5. Period for calculation of fee Exclusion for the purpose of fee calculation is to be allowed only when the same has been explicitly provided by the Hon’ble NCLT/ NCLAT or any other court of law and will operate only for the asset which could not have been realised during the excluded period.
Link – https://ibbi.gov.in/uploads/legalframwork/276e15152ac2147c101fcbfbf37d0ddb.pdf
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