Thirdly, due to the sluggish economy, even the prospective resolution applicants (other than Asset Restructuring Companies) would first like to secure themselves before they bid for others.ģ) What are your recommendations to improve the IBC proceedings? Especially in the case of a secured creditor, who will not like to part with smaller pie from the cake if it has the secured asset in its kitty.
Blue streak liquidation driver#
The second reason can be that the resolution plans received by COC (who have been given the driver seat for resolution having commercial wisdom to decide) are not found by them as commercially viable or the haircut proposed or mode of commissioning of the resolution plan are not acceptable to them. If there is no unsold inventory, receivable, or any land bank, nobody would like to proceed with taking over such assets which will not give any return. For example: With respect to a corporate debtor who is in the real estate sector, any resolution applicant will only proceed with submitting its resolution plan if there is any unsold inventory or still there is receivable from customers.
The main reason for the same is that most of the corporate debtors which are under CIRP are those where there are no assets or lucrative business for which a resolution applicant can bid for. In fact, in the worst case, the financial institution might have to agree for a haircut to the tune of 90 per cent or they might not receive anything at all.Ģ) Why is the number of cases of liquidation under IBC on the rise?
Blue streak liquidation code#
As not every financial institution or operational creditor is using I&B Code as they are aware that if a corporate debtor undergoes CIRP proceedings, there is a negligible chance for the creditor to receive the debt without a haircut. However, practically barring a few successful resolutions or settlements, there is no reduction in stressed assets. Instead of waiting until the end, the financial institutions or operational creditors have the mechanism to use I&B Code 2016 as a tool to raise the alarm early and with a time-bound procedure. If we look on subjective terms, we can say yes, I&B code has helped in reducing stressed assets on paper as of now. KKR plans to exit Max Healthcare: Deal could be at 5% to existing share price
0 kommentar(er)
