The bankruptcy code alone can’t resolve distressed debt
4 years ago

The bankruptcy code alone can’t resolve distressed debt

Live Mint  

The Insolvency and Bankruptcy Code introduced a much-needed bankruptcy law to India. Hence, the need of the hour is to strengthen processes for the resolution of distressed debt operating in a pre-bankruptcy phase, and thereby help companies avoid the label of being bankrupt. This entails ensuring that distressed debt can be sold to those equipped to derive value, as well as various ways of securitization and transfer of economic interests to facilitate the revival process. Asset Reconstruction Companies created under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002 are allowed to buy distressed debt with a combination of cash and securities via an auction mechanism. Recall, the market for stressed assets in India consists of an upstream market comprising accounts that have been identified as ‘Special Mention Accounts’ for the purpose of early stress discovery, and a downstream market for NPAs where the payment of dues has been delayed for greater than a minimum threshold of days.

India Market Debt Bankruptcy Sma Ibc Npas Distressed Distressed Debt  code  distressed  ibc  npas  debt  india  markets  cant  market  resolve  economic  companies  bankruptcy

History of this topic

The Insolvency Code’s progress: From deep haircuts to fuller recoveries
1 month, 2 weeks ago

The Insolvency Code’s progress: From deep haircuts to fuller recoveries

Live Mint  

The Insolvency and Bankruptcy Code has long been associated with delays and financial creditors taking significant losses in high-profile corporate insolvencies. The National Company Law Appellate Tribunal dismissed challenges from competing bidders and upheld the resolution plan of Sarda Energy, ensuring full recovery for financial creditors. Similarly, in the more recent case of Sripriya Kumar, financial creditors received more than …

The Forgotten Creditors: IBC's Dual Approach For Homebuyers And Other Consumers
3 months, 3 weeks ago

The Forgotten Creditors: IBC's Dual Approach For Homebuyers And Other Consumers

Live Law  

The Insolvency and Bankruptcy landscape in India underwent a significant transformation with the enactment of the Insolvency and Bankruptcy Code in 2016. Homebuyer as Financial Creditor| RERA-IBC Standoff Under the Insolvency and Bankruptcy Code 2016, creditors are categorized into two distinct groups: financial creditors, defined under Section 5, and operational creditors, defined under Section 5. The NCLAT also in the …

Why India's bankruptcy regime needs to be fixed
1 year, 11 months ago

Why India's bankruptcy regime needs to be fixed

Live Mint  

New Delhi: The government is proposing to make changes to India’s six-year-old Insolvency and Bankruptcy Code. It was introduced with the objective of simplifying insolvency and bankruptcy proceedings, protecting the interests of all stakeholders — the company, employees, debtors, and especially, creditors—and for timely revival of the company. 25,000 in line for Flipkart’s $700 mn Esop cash bonanza Reforms set …

Corporate India needs a proactive mindset for debt resolution
3 years ago

Corporate India needs a proactive mindset for debt resolution

Live Mint  

Over the years, concerted efforts have been made to determine and resolve non-performing assets of banks and financial institutions in our country. As per the RBI’s March Financial Stability Report, gross NPAs are expected to be slightly elevated at around 11.22% of overall credit deployment by March 2022 for all scheduled commercial banks. In an effort to trim NPAs, a …

Our bankruptcy code deserves credit for what it has achieved
3 years, 4 months ago

Our bankruptcy code deserves credit for what it has achieved

Live Mint  

Notwithstanding the different legal frameworks for bankruptcy and insolvency in place in various countries, all of them have two leading objectives: to facilitate liquidation of financially unviable companies, and to protect the rights of and provide equal treatment to similarly-situated creditors and other stakeholders. The Indian insolvency framework in the form of the Insolvency and Bankruptcy Code, 2016, is unique …

Discover Related