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ARTICLE · 04 OCTOBER 2021

Code Of Conduct For CoC: Caging The Commercial Wisdom?

The increasingly large haircuts that creditors are taking under the Insolvency and Bankruptcy Code, 2016 (Code) has alarmed stakeholders and government alike.

IndiaInsolvency/Bankruptcy/Re-Structuring

Introduction

The increasingly large haircuts that creditors are taking under the Insolvency and Bankruptcy Code, 2016 (Code) has alarmed stakeholders and government alike. Answering a query raised by the Parliamentary Standing Committee on Finance1 on low recovery rates with haircuts as high as 90-95%, the government simply shifted the onus to the committee of creditors (CoC) exalting their status as the predominant player in the entire process. There is an elephant in the room that needs to be addressed. However, is regulating the CoC a solution to the problem? This article analyses the practical challenges in implementing the proposed code of conduct for the CoC (Code of Conduct).

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The above is a generic analysis and should not be regarded as a substitute for specific advice based on the facts of a client’s objectives and specific commercial agreements reached. Please do reach out to us at [email protected] for any queries.

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