RCOM Insolvency Proceedings: Situations Galore

The Reliance Communication-Ericsson legal battle, which led the Anil Ambani controlled company to the insolvency court, has been a watershed moment not just for reflecting the state of the telecom sector, but also for the effectiveness of the Insolvency and Bankruptcy Code ("the Code").

For a person tracking the development of Insolvency Law, this particular case has evoked a lot of interest as it continues to pose new situations and prod the lawmakers to evaluate the practicality and effectiveness of an otherwise wonderful regime. To start with, it was a unique case where the Corporate Debtor was taken to the insolvency court by a disgruntled operational creditor despite the financial creditors of the Corporate Debtor rallying in support behind it. The Financial Creditors, despite the risk to their investment and classification of account as NPA, were opposed to insolvency proceedings being initiated and were trying to work out a settlement which in their assessment