Liquidation

Bankruptcy cases are taking longer to resolve and yielding lower values for lenders, a credit rating agency analysis said on Monday. The average number of days taken to close a case either through a resolution process or liquidation was at its highest at 588 days for financial creditors if one were to look at official data for the first nine months of the current fiscal, it said, adding that it was 531 days in FY22 and 463 days in FY21. The agency analysed official data released by the Insolvency and Bankruptcy Board of India to arrive at its findings. The stretched timelines have resulted in admissions outpacing case closures every year since FY18, India Ratings and Research said, adding that the only exception to this was FY21 where admission of cases got restricted on account of the pandemic. As against the 270 days stipulated in the Insolvency and Bankruptcy Code, the timeline for the Corporate Insolvency Resolution Process (CIRP) overshoots the mandatory timeline in 63 per cen

Silvergate collapsed amid scrutiny from regulators and a criminal investigation by the Justice Department's fraud unit into dealings with fallen crypto giants FTX and Alameda Research

Secured creditors, typically banks and bondholders, would continue to have first claim on proceeds of an insolvency resolution plan, but only up to the liquidation value of the corporate debtor

Honouring secured contracts and mimicking the liquidation waterfall could promote a judicious system of distribution of proceeds and minimise disputes

Draft IBC amendments propose to remove 'perverse incentives'

Credit growth in the system has touched a decade high, a level seen last in 2011

SARFAESI and Debt Recovery Tribunals have yielded recovery rates comparable to the IBC mechanism, says Trend and Progress Report

The company is seeking a restructuring of the loan, but it faced steep losses. Around this time, some activist investors bought some of the bonds

"Lenders will decide on the further course of action, including the stance for negotiations on Friday," the source said

While Deloitte, the process advisor to RCap's administrator, is said to be rooting for liquidation, CoC advisor KPMG hopes to close deal and award the firm to highest bidder

In November last year, the Reserve Bank of India had sent the company to debt resolution after it defaulted on its loans worth Rs 24,000 crore

Banks oppose consortium plea for handover of the company

The liquidation of Lehman Brothers' brokerage unit has ended, 14 years and 13 days after its parent's bankruptcy helped trigger a market freefall and global financial crisis

If any claim is not filed during the liquidation process, the amount of claim collated during CIRP should be verified by the liquidator

In a move that will provide better market-linked solutions for stressed companies, watchdog IBBI has amended its regulations to allow sale of one or more assets of an entity undergoing insolvency resolution process, besides other changes. Also, the Committee of Creditors (CoC) can now examine whether a compromise or an arrangement can be explored for a corporate debtor during the liquidation period. The Insolvency and Bankruptcy Board of India (IBBI) has amended the regulations with the "objective to maximise value in resolution" and they came into effect from September 16. As many as 1,703 Corporate Insolvency Resolution Processes (CIRPs) ended up in liquidation till the end of June this year. The regulator has permitted a resolution professional and the CoC to look for sale of one or more assets of the corporate debtor concerned in cases where there are no resolution plans for the whole business. The Insolvency and Bankruptcy Code (IBC) provides for a market-linked and time-boun

IBBI latest data suggest only 14 per cent yielded resolution plans since the inception of IBC

Nearly half of the 3,247 insolvency cases have been resolved through liquidation, and only a paltry 457 or 14 per cent of them through asset sale as per their lenders-approved resolution plans, a report said on Friday. Even the various resolution processes have witnessed the recovery of debt of just 31 per cent on an average, said the data from the Insolvency & Bankruptcy Board of India. The data which covers all the cases since the implementation of the Insolvency and Bankruptcy Code (IBC) five years ago till December 2021 reflects very slow pace of the process, according to an analysis by Icra Ratings. Liquidation means lenders or financial firms face the maximum brunt of losses on their books. Of the Rs 7.52 lakh crore claims made by the creditors on their borrowers, the lenders could realise only Rs 2.5 lakh crore, reflecting the pains of liquidation that lenders were forced to suffer, Icra Ratings said in its analysis. While various NCLTs (National Company Law Tribunals) have

According to an official release, it has been noticed that there has been a substantial delay in the completion of voluntary liquidation process

The Insolvency and Bankruptcy Board of India (IBBI) has amended regulations pertaining to voluntary liquidation process as part of efforts to streamline the process. Anoop Rawat, Partner (insolvency & bankruptcy) at Shardul Amarchand Mangaldas & Co, said the amendment seeks to streamline the voluntary liquidation process by reducing the timelines and imposing greater responsibilities on liquidator. "The requirement of new form H relieves some burden off the adjudicating authorities, with relevant data and satisfaction of compliance checks being available to it in a structured tabular format. "This shall aid in further enhancing the freedom of exit for the investors in line with India's ambitious goals of providing ease of doing business to investors during all the phases of the life-cycle of businesses," Rawat said. IBBI, a key institution in implementing the Insolvency and Bankruptcy Code (IBC), has notified the changes in the voluntary liquidation process regulations.

Founded in 2011 by Jaydeep Barman and Kallol Banerjee, Rebel Foods started its journey with Faasos in Pune