IBBI gives big relief to bankrupt companies, gets permission to sell assets in part

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IBBI gives big relief to bankrupt companies, gets permission to sell assets in part


Photo:FILE IBBI

IBBI: The Insolvency and Bankruptcy Board of India (IBBI) has amended its rules to provide better market-linked solutions to stressed companies. After these amendments, now the sale of one or more properties of an entity which has come under the insolvency resolution process will be allowed. That is, companies will be able to sell their assets in parts at the same place. This will enable them to get better value. Further, the Committee of Creditors (CoC) can now examine whether any settlement or settlement can be explored with the corporate debtor during the liquidation period.

The new ones came into effect from 16 September

IBBI has amended the rules “for price maximization in the resolution process” and these have come into force from 16 September. At least 1,703 Corporate Insolvency Resolution Processes (CIRPs) have been completed in liquidation till the end of June this year. In cases where there is no resolution plan for the entire business, the regulator has allowed the corporate debtor to explore the possibility of selling one or more assets. IBC provides for market-linked and time-bound resolution of stressed assets.

have to look for claims

Gaurav Gupte, Partner, Cyril Amarchand Mangaldas said that the amendment will lead to better market-based solutions for insolvency resolution. “The amendment will ensure that better information about the insolvency company and its assets is timely available to the market, including potential resolution applicants,” he said, adding that the resolution professional will be provided with the known (based on the books of accounts) creditors of the company concerned, he said. will have to actively seek out claims, so as to provide a clear picture of the debt.

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