In a significant move that would bring major changes to insolvency procedures, the Insolvency and Bankruptcy Board of India (IBBI) has proposed to allow the sale of part assets/businesses of corporates facing such proceedings.
However, such an approach can be explored by resolution applicants and creditors only, said the discussion paper, which was released by the insolvency regulator with the aim of improving the value of stressed assets and lowering delays in the insolvency processes.
The discussion paper also looks at the need for increasing the period for submitting the information memorandum and reducing the time for filing avoidance applications. This would help potential buyers have complete information about the assets of the insolvent firms involved, according to the paper. In the cases where liquidation is initiated either when the insolvency resolution process fails or the committee of creditors (CoC) decides to go ahead and liquidate the company, the CoC will have the right to act as a stakeholders’ consultation committee (SCC).advertisements.