Meaning of Information Memorandum

A specific type of memorandum is the policy briefing note, a document for transmitting policy analysis into the political decision making sphere. Typically, a briefing note may be denoted as either “for information” or “for decision”.

Definition of Information Memorandum under IBC.

Section-5 (10) “information memorandum” means a memorandum prepared by resolution professional under sub-section (1) of section 29;

Purpose

The primary purpose of a memo “for decision” is to support decision making – and also to “help (or sometimes influence) a decision-maker to make a better decision in a particular problem situation than he might otherwise have made without the analysis”. Other purposes that the briefing note can serve include: conveying information; informing decisions, making a request, providing a response to a question, making a suggestion, presenting an informal report, proposing a solution to a problem, or documenting a reference for future use.

Structure

As the communication mechanism of the policy analysis process, the briefing note should provide a coherent synopsis of a policy problem, identify different policy options for addressing the problem, articulate opposing perspectives and advocate a recommended option. The typical structure for a briefing note includes a description of the proposed policy; relevant background information; a discussion of key considerations (including implementation concerns, financial considerations, stakeholder impacts, and possible unanticipated consequences), a summary of arguments for and against the policy and a recommended decision.

Quality criteria

There is no universal standard for a briefing note, but it is generally understood to be a concise, coherent summary of a public policy problem with a clearly articulated logic for following a recommended course of action.

Section -29 of IBC, 2016  Preparation of information memorandum.

Resolution Professional Shall prepare Resolution Plan:-

1. The resolution professional shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Board for formulating a resolution plan.

2. The resolution professional shall provide to the resolution applicant access to all relevant information in physical and electronic form, provided such resolution applicant undertakes-

(a) to comply with provisions of law for the time being in force relating to confidentiality and insider trading;

(b) to protect any intellectual property of the corporate debtor it may have access to; and

(c) not to share relevant information with third parties unless clauses (a) and (b) of this sub-section are complied with.

Explanation. For the purposes of this section, “relevant information” means the information required by the resolution applicant to make the resolution plan for the corporate debtor, which shall include the financial position of the corporate debtor, all information related to disputes by or against the corporate debtor and any other matter pertaining to the corporate debtor as may be specified.

Regulation -36 of IBBI (CIRP)- Information memorandum.

Time and manner of Submission of Information Memorandum:-

(1) Subject to sub-regulation (4), the resolution professional shall submit the information memorandum in electronic form to each member of the committee within two weeks of his appointment, but not later than fifty-fourth day from the insolvency commencement date, whichever is earlier.

Contents of Information Memorandum

 (2) The information memorandum shall contain the following details of the corporate debtor-

(a) assets and liabilities with such description, as on the insolvency commencement date, as are generally necessary for ascertaining their values. Explanation: ‘Description’ includes the details such as date of acquisition, cost of acquisition, remaining useful life, identification number, depreciation charged, book value, and any other relevant details.

(b) the latest annual financial statements;

(c) audited financial statements of the corporate debtor for the last two financial years and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application;

(d) a list of creditors containing the names of creditors, the amounts claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims;

(e) particulars of a debt due from or to the corporate debtor with respect to related parties;

(f) details of guarantees that have been given in relation to the debts of the corporate debtor by other persons, specifying which of the guarantors is a related party;

(g) the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake;

(h) details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities;

(i) the number of workers and employees and liabilities of the corporate debtor towards them;

(j) Omitted

(k) Omitted

(l) other information, which the resolution professional deems relevant to the committee.

Resolution Professional shall proved any other information as desired by members:

(3) A member of the committee may request the resolution professional for further information of the nature described in this Regulation and the resolution professional shall provide such information to all members within reasonable time if such information has a bearing on the resolution plan.

Resolution Professional shall not share any information without undertaking from Members

(4) The resolution professional shall share the information memorandum after receiving an undertaking from a member of the committee to the effect that such member or resolution applicant shall maintain confidentiality of the information and shall not use such information to cause an undue gain or undue loss to itself or any other person and comply with the requirements under sub-section (2) of section 29.

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