Resolution of Stressed Assets under the Insolvency and Bankruptcy Code, 2016: A Structured Approach to Financial Rehabilitation
The Insolvency and Bankruptcy Code (IBC), 2016 provides a comprehensive and time-bound framework for the resolution of stressed assets in India. It marks a paradigm shift from the traditional debtor-in-possession model to a creditor-in-control approach, with the objective of maximizing asset value and fostering stronger credit discipline. The National Company Law Tribunal (NCLT) is designated…
Read articleAvailable Frameworks for Asset Restructuring through the Sale of Financial Assets
The restructuring of assets, particularly through the sale of financial assets, constitutes a strategic initiative aimed at enhancing an entity’s financial stability and operational efficiency. This process typically involves the divestment of specific financial instruments—such as loans or receivables—to improve liquidity, reduce leverage, and reallocate capital toward core business activities or growth initiatives. Asset sales…
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What is a Bankruptcy remote?
A bankruptcy remote entity is a special-purpose vehicle (“SPV”) that is formed to hold a defined group of assets and to protect them from being administered as property of a bankruptcy estate. The corporate documents of bankruptcy remote like memorandum association and article association may also attempt to create disablements to a bankruptcy filing. For…
Read article Explained: Insolvency Resolution Process for Corporate Persons regulation 2020: Fourth amendment to IBBI 2016
The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2020 on August 7, 2020. As per the latest amendment, which is effective from 07th August 2020, the authorized representative of creditors shall seek voting instructions only after the circulation…
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Understanding the proceedings against large Corporates under IBC
Following the ordinance empowering RBI to lay down the process of initiating steps under the Insolvency and Bankruptcy Code (IBC), an Internal Advisory Committee (IAC) is set up by RBI to oversee the specific steps that are initiated by bankers for resolution of a bad debt. In its first meeting on June 12, 2017, the…
RBI Guidelines on the Restructuring of Advances by Banks
The Reserve Bank of India (RBI) issued comprehensive guidelines to enable the restructuring of advances by banks in response to the financial distress caused by the COVID-19 pandemic. These guidelines allow for a one-time modification of loan terms for eligible borrowers without necessitating a downgrade in asset classification, provided that specific regulatory conditions are met.…
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