Decoding IBC (Amendment) Ordinance, 2020 For Creditors And Corporate Debtors

In order to prevent companies to be dragged into insolvency under the Insolvency and Bankruptcy Code, 2016 ("Code") due to the present pandemic, certain announcements were made by the Government under the Code. In this article, we have analysed the effect of these announcements on possible scenarios that the creditors or corporate debtors may be faced with. Before proceeding with our analysis, it may be worthwhile to have a brief recap on the announcements by the Government.

• March 24, 2020 - The Union Finance Minister announced that the threshold for invoking insolvency proceedings was raised from Rs. 1 lakh to Rs. 1 crore, which was subsequently notified on same date. In the same announcement, it was mentioned that the Government may consider suspension of Sections 7, 9 and 10 of the Code;