Explore the significance of the confidentiality undertaking for the Information Memorandum in corporate insolvency resolution. Learn about the legal framework, sample undertaking, and its implications.
Regulation 36(4) provides that 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.
Further, Section 29(2) of the Code provide that 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.
Annexure A:
Sample Confidentiality Undertaking for an Information Memorandum
(On The Letterhead of the Financial Creditor/Resolution Applicant)
CONFIDENTIALITY UNDERTAKING
This confidentiality undertaking has been signed by __________________________, having its office at _____________________ acting through Mr./Ms. _____________________, the authorized signatory / authorized representative (which expression shall, unless repugnant to the context, include its successors in business, administrators in business, administrators, insolvency professional, liquidator and assigns or legal representative) on ______day of ________, 2018 and submitted to Mr. __________, an Insolvency Professional having Registration No. ________________________.
WHEREAS M/s. ____________________, a company registered under Companies, Act, 1956 (thereafter referred as (Corporate Debtor) is under Corporate Insolvency Resolution Process pursuant to Hon’ble NCLT (__________ Bench) order dated ______________ and subsequently, Mr. ___________ having Registration No. ________________________ has been appointed as a Resolution Professional (RP) by the Committee of Creditors.
WHEREAS RP has prepared Information Memorandum as per Section 29(1) of the Insolvency and Bankruptcy Code, 2016 and Regulation 36 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
WHEREAS RP is required to share the Information Memorandum after receiving an undertaking from the member of the committee of creditors to the effect that such member shall maintain confidentiality of the information and shall not use such information to cause any undue gain or undue loss to itself or any other person and comply with the requirements under Section 29(2) of the Insolvency and Bankruptcy Code, 2016 as defined under Regulation 36(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
THEREFORE, the Member of Committee/Financial Creditor/Resolution Applicant hereby declares and undertakes as follows:
WE HEREBY DECLARE AND UNDERTAKE that we will not divulge any part of the information contained in the Information Memorandum of Corporate Debtor, prepared as per Section 29 (1) of the Insolvency and Bankruptcy Code, 2016 and Regulation 36 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, through oral or written communication or through any mode, to anyone.
WE FURTHER UNDERTAKE AND DECLARE that we shall comply with provisions of law for the time being in force relating to confidentiality and insider trading; and shall protect any intellectual property of the Corporate Debtor which we may have access to. We shall take all necessary steps to safeguard the privacy and confidentiality and shall use our best endeavours to secure that no person acting on our behalf or ourselves divulge or disclose or use any part of the relevant information 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 in compliance with the provisions of the Insolvency and Bankruptcy Code, 2016.
PROVIDED THAT nothing contained in this Confidentiality Undertaking shall apply to any disclosure:
(i) required by us by the order of a court of competent jurisdiction or an appropriate regulatory, statutory or judicial authority;
(ii) of any information which is in the public domain otherwise than as a result of a breach of this Confidentiality Undertaking, or
(iii) by us to our legal and other professional advisors.
Signed on behalf of
M/s _________________________________
by ____________________
(Name and Designation)
Authorised Signatory
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