IBC ordinance shields against covid-19 insolvencies

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Insolvency and Bankruptcy Code Ordinance covid-19 suspends fresh bankruptcy proceedings

The Indian government has recently amended the Insolvency and Bankruptcy Code (IBC) through an ordinance. The Insolvency and Bankruptcy Code Ordinance, 2020, came into effect on 5 June 2020, and suspends fresh bankruptcy proceedings against persons impacted because of covid-19 for at least six months, and up to a maximum of one year.

The ordinance inserted section 10A in the code, which prevents companies that are experiencing distress on account of the unprecedented situation from being pushed into insolvency proceedings for any default arising on or after 25 March 2020, for some time.

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Piyush Gupta is the head of aviation and competition at INCE. He can be contacted at piyushgupta@incegd.com.