Rajesh Sharma’s Post

Ministry of Corporate Affairs (MCA) to Enhance Recovery from Corporate Insolvency Process July 01, 2024 The Ministry of Corporate Affairs (MCA) is actively working on increasing the recovery from the corporate insolvency process under the Insolvency and Bankruptcy Code (IBC), according to MCA Secretary Manoj Govil. Speaking at an event in New Delhi on July 1st, Govil emphasized that this initiative aligns with the government's broader agenda to improve ease of doing business. This encompasses efficient processes for setting up operations, conducting business, and winding up. An August 2023 analysis of 542 corporate insolvency procedures completed under the IBC, 2016 revealed a recovery rate of 30.8%. For more details, read here: https://lnkd.in/gucZYUUu #CorporateInsolvency #InsolvencyAndBankruptcyCode #EaseOfDoingBusiness #MCA #RecoveryRates #BusinessNews #CorporateGovernance #IndiaBusiness #PolicyUpdate

𝐋𝐢𝐪𝐮𝐢𝐝𝐚𝐭𝐢𝐨𝐧 𝐏𝐫𝐨𝐜𝐞𝐬𝐬 - 𝐀 𝐇𝐚𝐧𝐝𝐛𝐨𝐨𝐤 𝐛𝐲 𝐭𝐡𝐞 𝐈𝐂𝐀𝐈 Liquidation Process – A Handbook for the Guidance of Insolvency Professionals The Committee on Insolvency & Bankruptcy Code of the Institute of Chartered Accountants of India (ICAI) has brought out a publication – *Liquidation Process – A Handbook for the Guidance of Insolvency Professionals* to facilitate professionals in understanding the various functions and responsibilities while performing his duties as a Liquidator in conducting the Liquidation Process of the Corporate Debtors. The IBC has laid an extensive framework for Liquidation Process and elaborate Regulations thereunder. Liquidation Process of the corporate debtor is initiated under following circumstances: • No resolution plan is received by the Adjudicating Authority before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process • The resolution plan received is rejected by the Adjudicating Authority for non- compliance of the requirements specified • The Committee of Creditors (COC) with not less than 66% of the voting share, at any time during the Corporate Insolvency Resolution Process (CIRP) but before confirmation of a resolution plan, including at any time before the preparation of information memorandum, decides to liquidate the corporate debtor • The resolution plan approved by the Adjudicating Authority is contravened by the corporate debtor and any person other than the corporate debtor whose interests are prejudicially affected by such contravention, makes an application to the Adjudicating Authority for a liquidation The Adjudicating Authority orders for liquidation of the corporate debtor in the aforesaid situations. As per the IBBI, 2249 orders for commencement of liquidation have been passed up to September 2023. The publication is quite useful for all stakeholders connected to liquidation. The Institute of Chartered Accountants of India The Institute of Chartered Accountants of India (ICAI) #Liqudation #IBC #IBBI #Corporatedebtor #ICAI #ResolutionPlan #CorporateInsolvency #CoC #InformationMemorandum #AdjudicatingAuthority.

Recovery from defaulters under insolvency law is on an upward trajectory. ▶️The recovery rate from defaulters under India’s Insolvency and Bankruptcy Code (IBC) has increased to 31.12 per cent of creditors' claims in the June quarter, up from 25 per cent in the preceding three months. ▶️This can be attributed to the broader economic recovery and the growing number of bidders for stressed assets #insolvency #assets #restructuring #disputeresolution #NCLT #NCLAT Dua Associates

🚀 Understanding the Corporate Insolvency Resolution Process (CIRP) in India 🚀 In today’s complex business environment, knowing how to navigate corporate insolvency is essential. The Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) has redefined the landscape for companies facing financial distress, offering a streamlined path for both revival and liquidation. 💼 The IBC framework emphasizes protecting stakeholder interests, preserving asset value, and ensuring a transparent, time-bound resolution. Here’s a snapshot of what CIRP entails: 🔹 Role of the Resolution Professional (RP): The RP manages operations, facilitates proposals, and steers the insolvency process, ensuring compliance with legal deadlines. 🔹 Committee of Creditors (CoC): This body has the power to approve or reject resolution plans, playing a critical role in deciding the debtor’s future. 🔹 Moratorium for Asset Protection: A temporary halt on legal actions allows focus on restructuring or orderly liquidation, safeguarding company assets. For businesses, investors, and financial professionals, understanding these statutory provisions can be a game-changer. CIRP not only promotes an efficient resolution process but also strengthens India’s insolvency regime, contributing to a stable and dynamic economy. For Full article 👉 https://sarojaachanta.in/   #CorporateInsolvency #CIRP #IBC #InsolvencyResolution #NCLT #ResolutionProfessional #CommitteeOfCreditors #AssetProtection #CorporateLaw #BusinessRestructuring#Corporate Insolvency Resolution Process# Insolvency and Bankruptcy Code (IBC)# Statutory Provisions for CIRP# Corporate debtor Insolvency India# CIRP and NCLT process# Role of Committee of Creditors (CoC)# Liquidation process under IBC# Resolution Professional responsibilities# Moratorium in insolvency resolution# Corporate insolvency statutory framework#  

Insights on Proposed Amendments to the IBBI Insolvency Regulations, 2016 The Insolvency and Bankruptcy Board of India (IBBI) has proposed key amendments to the Insolvency Resolution Process for Corporate Persons. These changes aim to streamline procedures and enhance the efficacy of the insolvency process. Dive into our detailed analysis to understand the potential impacts on stakeholders: https://lnkd.in/gfahW-HQ #Insolvency #Bankruptcy #IBBI #CorporateLaw #LegalInsights #indialawllp

The success of the Insolvency and Bankruptcy Code (IBC) in reshaping corporate insolvency in India is truly remarkable. Finance Minister Nirmala Sitharaman highlighted that the IBC has rescued 3,171 distressed companies and closed unviable ones, showcasing its robust framework that prioritizes resolution over liquidation. This achievement, comparable to the three-decade accomplishments of the Board of Industrial and Financial Reconstruction (BIFR), underscores the significant impact of the IBC in just seven years. The pivotal role played by the National Company Law Tribunal (NCLT) and the Insolvency and Bankruptcy Board of India (IBBI) cannot be overstated. Their streamlined processes and efficient handling of insolvency cases have restored trust and transparency in the financial system, fostering responsible credit behavior and corporate governance. As an Insolvency Resolution Professional (IRP) who has resolved seven Corporate Insolvency Resolution Processes (CIRPs) involving claims of over Rs 7,500 crores, delivering positive outcomes for over 5,000 homebuyers and slum dwellers, I can attest to the profound economic and social impact of these resolutions. The introduction of a paradigm shift in the debtor-creditor relationship has led to more than 28,000 applications involving defaults of over Rs 10 lakh crore being withdrawn before admission, reflecting a significant shift towards a culture of repayment and accountability. The collective efforts of the resolution profession fraternity have added substantial economic value for all stakeholders involved. Moving forward, enhancing the capacities of NCLT and NCLAT will be crucial to expedite resolutions and contribute to a more resilient economic environment. The IBC's journey so far has been commendable, and with continued improvements, it holds the promise of even greater achievements. #InsolvencyAndBankruptcyCode #IBC #CorporateResolution #NCLT #IBBI Incorp Restructuring Services LLP (IPE) InCorp India

Libord IRP Advisors Private Limited is registered as Insolvency Professional Entity (IPE) with Insolvency and Bankruptcy Board of India (IBBI) vide Registration No. IBBI/IPE/0161. Read more on below article... https://lnkd.in/d4rJZMKs #IRP #insolvencyresolution #insolvencylaw #lawyer #insolvencyupdates #charteredaccountant #CorporateInsolvency #ibbi #bankruptcy #CIRP #LiquidationProcess #liquidation #CorporateInsolvency

𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆𝘀' 𝘄𝗶𝘁𝗵 𝗚𝗮𝘂𝗿𝗶: 𝟮𝟮𝗻𝗱 𝗪𝗲𝗲𝗸-𝟮𝟮𝗻𝗱 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲: Today, on my birthday, I'm excited to share insights into a significant development in the realm of corporate law that has far-reaching implications for creditors and debtors alike. 𝗜𝗕𝗖 𝗔𝗺𝗲𝗻𝗱𝗺𝗲𝗻𝘁: 𝗦𝗮𝗹𝗲 𝗼𝗳 𝗔𝘀𝘀𝗲𝘁𝘀 𝗼𝗿 𝗥𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻 𝗣𝗹𝗮𝗻𝘀 𝗼𝗻 𝗮 𝗦𝗲𝗴𝗿𝗲𝗴𝗮𝘁𝗲𝗱 𝗕𝗮𝘀𝗶𝘀 – 𝗔 𝗚𝗮𝗺𝗲 𝗖𝗵𝗮𝗻𝗴𝗲𝗿? The recent amendments to the Insolvency and Bankruptcy Code (IBC) have introduced the concept of the sale of assets or resolution plans on a segregated basis specifically under Regulation 37 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This significant change aims to enhance the flexibility and efficiency of the insolvency resolution process in India. Let’s delve into what led to this amendment, its impact on the IBC mechanism, and who stands to benefit the most.   Traditionally, the IBC required a single resolution plan for the entire corporate debtor, which often proved cumbersome and time-consuming, especially for large conglomerates with diverse business units. The segregated basis approach was introduced to allow for the sale of different units or assets separately, facilitating a more targeted and efficient resolution.   𝗪𝗵𝘆 𝗜𝘁 𝗛𝗮𝗽𝗽𝗲𝗻𝗲𝗱: - Large companies with multiple business units faced significant hurdles in finding a single resolution applicant willing to take over the entire entity. - Separate sales of assets can often fetch higher value than a bundled sale, thus maximizing returns for creditors. - Allows resolution professionals to devise more flexible and tailored solutions for different parts of the business.   𝗜𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝘁𝗵𝗲 𝗜𝗕𝗖 𝗠𝗲𝗰𝗵𝗮𝗻𝗶𝘀𝗺: - Facilitates quicker and more efficient resolutions, particularly for large and complex insolvencies. - Creditors may achieve better recovery rates compared to a single resolution plan. - Attracts a wider pool of bidders interested in specific assets or business units rather than the entire distressed entity.   𝗖𝗮𝘀𝗲 𝗟𝗮𝘄: A notable case that highlights the significance of asset segregation in resolution plans is the case of 𝗘𝘀𝘀𝗮𝗿 𝗦𝘁𝗲𝗲𝗹.Although this case pre-dates the amendment, the complexity and challenges faced during its resolution underscored the need for more flexible approaches, such as the segregated sale of assets, to expedite and optimize the insolvency resolution process.

The objective of India’s corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 is to ensure a company’s revival as a going concern. However, there may be situations where the sale of assets outside the ordinary course of business becomes necessary, or business unit/asset-wise resolution is more commercially viable, especially where a corporate debtor has diversified businesses. sagar dhawan and Ahkam Khan at Shardul Amarchand Mangaldas & Co discuss the need for clear regulations in India's insolvency framework to support business-unit or asset-wise resolutions, allowing better value recovery and flexibility in corporate restructuring. 👉 Join our membership: https://lnkd.in/gi5sZaTn #lawdotasia #ablj #iblj #cblj #asia #india #insolvency #asset #finance #corporatelaw #legaladvice #inhousecounsel #business #legalprofession #lawfirms #lawyers #legal #law

Indian Bankruptcy Code 2016: Providing a Revolutionary Solution for Financial Distress 🔥 The Insolvency and Bankruptcy Code (IBC), enacted in 2016, revolutionized corporate insolvency resolution in India. As of March 2023, the IBC process has helped recover over ₹3 lakh crore from bankrupt companies. 💰 However, delays remain a key challenge - the average time taken for resolution has increased from 342 days in 2018 to 592 days in 2022. ⏳ The IBC process map starts by initiating insolvency against the defaulting company. Till Dec 2022, a total of 21,888 cases had been admitted under IBC. 📋 Once admitted, an interim resolution professional takes charge, like Anshuman Mishra who was appointed for Jaypee Infratech. Potential bidders then submit resolution plans, with the highest bidder being approved. One of IBC's biggest success stories is Tata Steel's ₹35,200 crore acquisition of Bhushan Steel in 2018 after outbidding JSW Steel and others. 🏆 As we step into 2024, key challenges persist: 1) With just 28 NCLT benches, pendency stood at 23,495 cases at the end of 2022 📈 2) Only 3,960 insolvency professionals registered with IBBI as of March 2023 👥 3) Lack of clarity on ₹2 lakh crore personal guarantor liability overhang ❓ 4) India is yet to adopt UNCITRAL model law for cross-border insolvency cases 🌍 Potential Suggestions could include: - Establishing more NCLT benches, filling judicial vacancies ⚖️ - Stringent quality certification for insolvency professionals 🎓 - Comprehensive guidelines on guarantor liabilities under IBC 📝 - Joining countries like Singapore in adopting the UNCITRAL Model Law on Cross-Border Insolvency (a United Nations framework to handle bankruptcy cases across borders) 🌐 The IBC has been a game-changer for corporate insolvency resolution in India, but there's still room for improvement. With the right measures, it can become even more effective in resolving financial distress and reviving businesses. 💪 #InsolvencyandBankruptcyCode #CorporateInsolvency #FinancialDistress #IBC2016