BANKRUPTCY CODE
The great unease of doing business in India: How Make in India is losing its way in a bureaucratic maze
Despite improvements in doing-business rankings, India continues to face severe business setup challenges due to high costs, lengthy procedures and pervasive corruption. The bureaucratic inefficiencies and overregulation hinder startup growth and competitiveness, making manufacturing in India less attractive than in East Asia.
Cabinet approves bill making repossession easier for aircraft lessors
The union cabinet approved the Protection and Enforcement of Interests in Aircraft Objects Bill, allowing lessors to repossess aircraft in the event of lease payment defaults. The bill prioritizes the Cape Town Convention over local laws. Urgency arose after rulings like in Go First's case delayed aircraft repossessions, impacting the leasing market.
No competing bids for Jaiprakash Associates, NARCL sole contender
National Asset Reconstruction Co remains the preferred bidder to take over Jaiprakash Associates after no competing bid was received. NARCL's Rs 12,000 crore bid includes cash and security receipts backed by a government guarantee. JAL has been entangled in litigation and is one of the biggest insolvency resolution cases.
IBBI extends deadline for filing e-forms detailing liquidation processes till March
The Insolvency and Bankruptcy Board of India (IBBI) has extended the deadline for insolvency professionals to submit electronic forms for liquidation cases. The new deadline is now March 31, 2025. This extension follows representations from professionals citing technical issues. Previously, the deadline was extended from September 30 to December 31, 2024.
EPFO can initiate assessment proceedings during liquidation: NCLAT on companies under IBC
NCLAT ruled that statutory authorities including EPFO can initiate assessment proceedings during liquidation under IBC, but cannot continue such proceedings once a company is under moratorium. The decision upholds previous NCLT orders and resolves EPFO petitions against debt-ridden companies.
'Why can't govt of India adhere to timelines': SC calls for introspection over delay in filing pleas
The Supreme Court, led by Chief Justice Sanjiv Khanna, criticized government authorities for excessive delays in filing appeals, using a National Highways Authority of India (NHAI) case as an example. The NHAI's 295-day delay in filing against an NCLAT decision was deemed unacceptable, highlighting the need for procedural adherence.
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IBC turns lifeline for hospitals: Investors snap up distressed healthcare firms
Promoter-driven firms and hospital operators are targeting stressed healthcare assets through insolvency processes due to lower valuations. Despite risks, post-pandemic interest in healthcare is high, driven by insurance penetration and government schemes, leading to significant acquisitions and resolution cases.
Crack this code at liquidation, assets = 5% dues
Stressed companies under insolvency law have assets worth less than 5% of what they owe to lenders. As of September, 2,630 liquidation cases owed ?9.51 lakh crore but had only ?45,000 crore in assets. Delays and asset deterioration contribute to poor recovery, particularly in service-oriented firms.
NCLT directs initiation of insolvency proceedings against Hero Electric
NCLT has started insolvency proceedings against Hero Electric based on a plea from Metro Tyres. Metro Tyres claims Hero Electric defaulted on payments of Rs 1.85 crore for supplied tyres and tubes. Hero Electric's defense about quality issues was not accepted as they did not raise disputes within the stipulated time.
NCLAT sets aside EIH plea against NCLT order approving sale of Golden Jubilee Hotels
NCLAT dismissed EIH's appeal against the sale of Golden Jubilee Hotels. A Singaporean company won the bid. EIH, the previous operator, argued its exclusion was unfair. The tribunal sided with the creditors' decision. The new owner has the option to retain or replace EIH. The bidder cited EIH's mismanagement as a reason for the hotel's losses.
Husband cannot use bankcruptcy as excuse for not paying maintenance, wife, kids will get priority over claim of creditors: SC
The Supreme Court prioritized estranged wives and children's maintenance over creditors' claims in insolvency cases. The court ruled that maintenance, tied to the right to dignity, overrides claims under the Insolvency and Bankruptcy Code. A husband's diamond factory assets are subject to this ruling, ensuring the family's sustenance despite financial difficulties.
IBC under scrutiny: RBI's Rao urges better oversight for creditors¡¯ committees
RBI Deputy Governor M Rajeshwar Rao advocated for a mandatory code of conduct for the Committee of Creditors (CoC) in insolvency resolutions. He highlighted issues like prioritizing individual interests over collective ones and disagreements over valuation and distribution. Rao suggested empowering the IBBI to enforce these norms and emphasized the deterrent role of insolvency processes.
Govt appoints Vaibhav Chaturvedi as RBI representative on IBBI board
Vaibhav Chaturvedi, Chief General Manager of the Reserve Bank of India (RBI), has been appointed as an ex-officio member of the Insolvency and Bankruptcy Board of India (IBBI). Representing the RBI, Chaturvedi will contribute to the board's efforts in ensuring a transparent insolvency resolution process and strengthening the insolvency ecosystem.
Jaiprakash Associates' outstanding loan at Rs 55,526 cr as on Nov 10, 2024
Jaiprakash Associates Ltd (JAL), the flagship company of the financially troubled Jaypee Group, is facing insolvency proceedings with an outstanding loan of Rs 55,525.89 crore as of November 10, 2024. JAL has been admitted into the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, as per a June 3, 2024 order by the National Company Law Tribunal.
Ministry of Finance meets PSBs, investigative agencies on bank frauds
The finance ministry convened a meeting with public sector banks, government agencies, and investigative bodies like the CBI to expedite bank fraud investigations. Amendments to the Prevention of Corruption Act protect bankers' honest decisions, fostering better cooperation. These measures, along with the IBC and NARCL, aim to improve asset quality and resolve stressed banking assets.
Vidarbha Industries Power dragged to NCLT by CFM Asset over Rs 3,800 crore unpaid dues
CFM Asset Reconstruction Pvt Ltd has taken Vidarbha Industries Power Ltd (VIPL) to the National Company Law Tribunal (NCLT) for unpaid dues of nearly ?3,800 crore. VIPL, a Reliance Power subsidiary, defaulted on loans from Axis Bank and SBI, which were later sold to CFM ARC. The NCLT appointed an interim resolution professional to oversee the insolvency process.
Platforms to be created for discussions with CBI to expedite investigation in bank fraud cases; FinMin holds meet with stakeholders
The Department of Financial Services (DFS) and Central Bureau of Investigation (CBI) convened a meeting with Public Sector Banks (PSBs) in New Delhi to enhance cooperation in investigating bank fraud cases. Discussions focused on expediting investigations, leveraging the IBC and NARCL, and utilizing a new asset tracing application developed by PSB Alliance to improve asset recovery and deter future fraud.
Make insolvency more soluble: Reforming India's IBC process for better accountability
Supreme Court has ordered the liquidation of Jet Airways, criticizing NCLAT for ignoring its earlier judgment. This may result in creditors, including major banks, facing shortfalls. The decision highlights issues in India's insolvency process and calls for judicial accountability and specialized insolvency courts. Transparency and mediation are also discussed to improve the system.
NCLAT dismisses plea seeking insolvency against Amazon Wholesale
NCLAT supported NCLT's decision. The insolvency case against Amazon India was dismissed. Multiplier Brand Solutions claimed Amazon owed them money. Amazon disputed the amount. The courts agreed a dispute existed before the insolvency claim. The case involved services provided by Multiplier to Amazon.
Govt working on integrated platform for insolvency ecosystem: Official
The government is creating a new platform to improve the insolvency process. The platform will connect key stakeholders like the MCA and IBBI. It aims to speed up resolutions under the IBC. The IBC is a rescue mechanism, not a recovery one. Many insolvency cases have exceeded the 270-day deadline. Creditors have recovered a significant amount through resolved cases.
Creditors recover Rs 3.55 lakh crore till Sept under insolvency law
Creditors have recovered approximately Rs 3.55 lakh crore by resolving 1,068 insolvency cases under the IBC, 2016, as of September 2024. However, 1,388 out of 1,963 ongoing CIRP cases have surpassed the 270-day deadline. The government has implemented six amendments to the IBC and the IBBI has made over 100 regulatory changes to enhance the resolution process.
IBBI suggests monitoring panel to oversee resolution plan
India's Insolvency and Bankruptcy Board (IBBI) is proposing mandatory monitoring committees to oversee the execution of resolution plans under bankruptcy proceedings. These committees, appointed by creditors, would ensure compliance, manage asset transfers, and report progress to authorities, enhancing transparency and accountability in the resolution process.
IBBI proposes mandatory monitoring committees for resolution plans
The IBBI proposes monitoring committees to oversee resolution plans under IBC rules. These committees will ensure smooth implementation and increase confidence in the process. The committees will monitor asset transfer, compliance, and fund distribution. They will submit quarterly reports to authorities, ensuring transparency. Stakeholders can comment on the proposals by December 9.
Insolvency and Bankruptcy Board of India proposes several changes in latest paper
The Insolvency and Bankruptcy Board of India (IBBI) has put forward changes to liquidation rules, aiming to make the process smoother. These changes include simplifying bidder participation in auctions and allowing voluntary liquidation even with uncalled capital, aiming for quicker resolutions.
Byju's lenders oppose Aakash EGM on Wednesday
Questions resolution professional¡¯s nod for Byju Raveendran to represent Think & Learn on Aakash¡¯s board; says it violates the principle of protecting the maximum value of assets as laid down in the Insolvency and Bankruptcy Code.
IBC: Icra says lenders took 72 pc haircut in Q2; breach of timelines resulting in more liquidations
Indian banks are facing significant losses in corporate insolvency cases, with haircuts exceeding 70% due to delays in resolution processes. The lengthy timelines, often exceeding the stipulated 270 days, are leading to a higher number of liquidations, impacting lenders' recovery prospects.
Regular IBC tweaks needed to address bankruptcy challenges, says Corporate Affairs Ministry
The corporate affairs ministry emphasizes continuous refinement of the Insolvency and Bankruptcy Code to address future challenges in corporate restructuring. Planned amendments, including a creditor-led resolution framework and group insolvency mechanism, aim to keep the IBC dynamic and responsive to evolving business landscapes.
Regulatory changes to provide necessary push to surety bonds business, say experts
Regulatory changes and standardization are set to boost surety bonds introduced in 2022 by general insurance companies. These bonds will support India's infrastructure development, reduce reliance on bank guarantees, and allow banks to lend to other sectors. Legal and regulatory reforms are crucial for providing insurers equal recourse under the Insolvency and Bankruptcy Code.
IBBI tweaks norms to speed up insolvency resolution in housing
The IBBI has introduced amendments to the Insolvency Resolution Process for Corporate Persons, effective from September 24. These changes include appointing an interim representative for large creditor groups, like homebuyers, to ensure their effective representation during insolvency proceedings. This aims to enhance efficiency and fairness in the insolvency process.
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