Group Insolvency Framework: A Game-Changer For Business Families

Introduction

Intricate group structures, frequently headed by business houses or associations of related companies, have been a defining feature of Indian corporate culture. Groups with combined financial problems faced practical difficulties because the Insolvency and Bankruptcy Code, 2016 (IBC) previously handled insolvency on an entity-by-entity basis.¹ A historic reform that allows connected businesses to handle their debts collectively is the introduction of a group insolvency framework. Particularly for business houses whose fortunes are entwined across group entities, this action may allow for commercial restructuring, boost asset value, and protect stakeholder interests.²

Understanding Group Insolvency: Justification and Global Viewpoint