Understanding Avoidance Applications
The last five and a half years since the introduction of the
Insolvency and Bankruptcy Code, 2016 (Code) have witnessed a
sustained effort by all the stakeholders in settling and ironing
out some of the key issues relating to reorganization and
insolvency resolution of corporate persons, partnership firms, and
individuals in a time-bound manner, to ensure maximization of the
value of assets of such persons. In this regard, one of the most
critical aspects for maximization of value of a corporate person is
to ensure avoidance and reversal of transactions which are either
preferential, undervalued, fraudulent or extortionate in nature.
The basic purpose of identifying and red flagging such transactions
is to ensure that whatever value has been lost due to such
transactions, is made good, and recovered for the benefit of the
Corporate Debtor.
