The Insolvency Code Being Rewritten: For Better Or For Worse?

Amendments to the Insolvency and Bankruptcy Code, 2016 have been cleared by the Cabinet.

The proposed amendments seek to

• Extends the timeline for completion of the corporate insolvency resolution process to 330 days including litigation and judicial processes.
• Emphasises the need for speedy disposal of matters by NCLT at the application stage.
• Provides a mechanism through which a class of creditors may exercise their votes in the Committee of Creditors.
• A single window clearance system is proposed for restructuring applications to be approved along with resolution plans.
• Provides for a mechanism to pay dissenting financial creditors and operational creditors.
• Intends to provide the COC with the power to modify the distribution of resolution proceeds based on commercial considerations.