Global rating agency Moodys has said the effectiveness of a resolution under the Insolvency and Bankruptcy Code (IBC) is expected to be limited as the existing management may continue to play a role even after transferring control to insolvency professionals.
Once a resolution under IBC is initiated, control of the company shifts from the existing management to insolvency professionals. Nevertheless, given the nature of the assets, the management team in some cases will continue to play a role in preserving day-to-day operations.
In addition, the strict timelines of a resolution may force some companies into liquidation and may have a negative effect on banks, particularly in cases where little co…
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