LIQUIDATION PROCESS (SECOND AMENDMENT) REGULATIONS
/0 Comments/in Insolvency and Bankruptcy /by Vinod Kothari Consultants– Richa Saraf and Devisha Dhanuka (resolution@vinodkothari.com)
Pursuant to Notification No. IBBI/2017-18/GN/REG028, dated 27.03.2018, the very first amendment was brought into Regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 w.e.f. 01.04.2018 to permit sale of the corporate debtor as a going concern. The insertion, as aforementioned, was brought in force keeping in view the object with which the Insolvency and Bankruptcy Code, 2016 (“Code”) was formulated, i.e. to provide for an opportunity of revival of the entity under distress.
PRIORITY OF TAX DUES IN LIQUIDATION?
/0 Comments/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsBy Kasturi Chowdhury (resolution@vinodkothari.com)
The manner of distribution of the assets of a company during liquidation is fraught with ambiguity and settlement of such claims arising out of it has inconvenienced the parties concerned since the advent of the Insolvency and Bankruptcy Code, 2016 (“Code”). In a recent ruling, the judgement of the Hon’ble High Court of Hyderabad showed the path to be followed when there arose such conflict regarding priority of settling the dues of the Income Tax authority during liquidation of a Company. Read more →
Moratorium during Liquidation: Scope And Effect
/1 Comment/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsBy Richa Saraf (resolution@vinodkothari.com)
What is a moratorium?
The term has been defined in Merriam Webster Dictionary to mean “legally authorized period of delay in the performance of a legal obligation or the payment of a debt; a waiting period set by an authority; or a suspension of activity. Read more →
Reversibility of Liquidation Order?
/6 Comments/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsBy Richa Saraf (resolution@vinodkothari.com)
Insolvency and Bankruptcy Code was framed with the object to provide opportunity for revival to an insolvent company, however, since the rising number of liquidation cases, as against resolution, is a cause of worry.
“After more than a year of the Insolvency and Bankruptcy Code proceedings, there have been more liquidation cases than resolution of the non-performing assets accounts. According to a data from the Insolvency and Bankruptcy Board of India, in the National Company Law Tribunal, around 78 companies got liquidation orders since February 2017[1].”- quoted in an article in Business Standard.
“An analysis of companies that have completed the Corporate Insolvency Resolution Process (CIRP) till December reveals that liquidation orders were passed for as many as 30 companies. This is three times the number of 10 cases for which resolution was approved at the culmination of the CIRP, as per latest data available with the Insolvency and Bankruptcy Board of India.[2] – quoted in an article in Indian Express. Read more →
Financial Creditors & Committee of Creditors: What, Why and How?
/1 Comment/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsBy Megha Mittal (resolution@vinodkothari.com)
IBBI issues clarification w.r.t. voting powers of CoC
Brief Background:
Pursuant to the Insolvency and Bankruptcy (Amendment) Code, 2018, the crucial reduction of voting threshold from 75% to 66% for critical matters like approval of Resolution Plan, Extension of CIRP, and all matters of section 28 of the Insolvency and Bankruptcy Code, 2016 (Code), came into effect.
However, there still prevailed ambiguity as to how to determine this threshold of 66%. What shall be the fate of those financial creditors who abstained from voting? Read more →
NBFCs vs. FINANCIAL SERVICE PROVIDERS UNDER THE PURVIEW OF IBC
/0 Comments/in Financial Services, Insolvency and Bankruptcy, NBFCs /by Vinod Kothari ConsultantsIBC Second Amendment Bill : Salient Features
/0 Comments/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsCircumstances where CIRP can be declared void after initiation
/0 Comments/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsDictated decision-making: IBBI expects to usher effective decision-making in creditors’ committee meetings
/0 Comments/in Insolvency and Bankruptcy /by Vinod Kothari ConsultantsBy Vinod Kothari (resolution@vinodkothari.com)
The recent IBBI circular[1] dated 10-08-2018 makes an interesting reading. While it is lamenting the fact that the hard timeline-bound regime of the insolvency process will lead to unintended corporate mortality if the bank representatives attending the creditors’ committee (CoC) meetings are not empowered to decide, the amusing undertone is that it has directed the resolution professionals to ensure the attendees in CoC meetings are decision-makers themselves. Read more →