Insolvency professionals back success fee, warn against over-regulation

The NCLAT held that success fee is more in the nature of contingency and speculative it is not part of IBC provisions and is not chargeable

The success fee of resolution professionals (RPs) coming under the scanner has sent worrying signals in the industry concerned about over-regulation, which could be detrimental to the corporate insolvency resolution process. 

“It is a proven method and is followed in other jurisdictions. Marketing of assets, quality of information memorandum requires good expertise and comes at a cost,” said Anoop Rawat, partner, Insolvency & Bankruptcy at Shardul Amarchand Mangaldas & Co.

Raising questions of the legality of the success fees, the national company appellate tribunal said in its recent order that the role of the RP has to be like a