By Sikha Bansal
The Insolvency and Bankruptcy Board of India has notified the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019 (“Amendment Regulations”) and introduced major changes in the existing law. Majority of the amendments are curative, therefore, intended to resolve practical difficulties arising in liquidation proceedings as have been experienced so far. Read more →
Vinod Kothari
(resolution@vinodkothari.com)
The attention that reforms in liquidation regulations has received, relative to what has gone in case of resolution, is far lesser than deserved, given the percentage of the resolution cases that slip into liquidation. Most of the major liquidations initiated 12 to 18 months ago are either making a very tardy progress, or are stuck into dead-ends. There were several needed changes in the Liquidation Regulations, and it is so very heartening to see the IBBI announce the amendments vide the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019, concluding a consultation process that began almost 8-9 months ago. The best part is, the amendments have incorporated most of the useful suggestions that were made either in the roundtable meetings held across the country, several comments and write-ups[1], or subsequently in response to the Discussion Paper. Read more →
By Sikha Bansal
The Insolvency and Bankruptcy Code (Amendment) Bill, 2019 has been introduced in Rajya Sabha and will have a game-changing impact on the ongoing insolvency proceedings as well as the future of the Insolvency and Bankruptcy Code, 2016. Read more →
By Vinod Kothari
Insolvency laws are all about distributive justice, inspired by the pari passu rule enunciated centuries ago. The key theme of insolvency laws is that since there is a shortfall of assets to pay off everyone, everyone with similar ranking of priorities should be paid proportionately. Read more →
– CS Megha Mittal
[This article is intended for academic debate on the law around powers of the Committee of Creditors vis-à-vis the adjudicatory authorities, as it continues to evolve] Read more →
By Vinod Kothari [vinod@vinodkothari.com]; Abhirup Ghosh [abhirup@vinodkothari.com]
With the 12th Feb., 2018 having been struck down by the Supreme Court, the RBI has come with a new framework, in form of Directions[1], with enhanced applicability covering banks, financial institutions, small finance banks, and systematically important NBFCs. The Directions apply with immediate effect, that is, 7th June, 2019.
The revised framework [FRESA – Framework for Resolution of Stressed Accounts] has much larger room for discretion to lenders, and unlike the 12th Feb., 2018 circular, does not mandate referral of the borrowers en masse to insolvency resolution. While the RBI has reserved the rights, under sec. 35AA of the BR Act, to refer specific borrowers to the IBC, the FRESA gives liberty to the members of the joint lenders forum consisting of banks, financial institutions, small finance banks and systemically important NBFCs, to decide the resolution plan. The resolution plan may involve restructuring, sale of the exposures to other entities, change of management or ownership of the borrower, as also reference to the IBC. Read more →