Sale As A Going Concern Alternative In Liquidation

The need for interpretation and amendment of the Insolvency and Bankruptcy Code, 2016 (IBC), has arisen repeatedly since its enactment. A recent instance can be seen in the matter of Gujarat NRE Coke Ltd.

As the committee of creditors failed to agree on a corporate insolvency resolution plan, the National Company Law Tribunal (NCLT), Kolkata, on 11 January 2018 ordered liquidation of the company with a clear direction that the liquidation should be done by sale as a going concern. This is because it had been successfully argued before the tribunal that the company's period of crisis was over and closing the business would adversely affect about 1,178 employees, their families, numerous vendors and job workers – totalling about 10,000 people.