The new insolvency ordinance is expected to create substantial problems for SMEs and most may be liquidated if the revival plan does not work out.
At the heart of the problem is Section 29A, a new section of the Insolvency and Bankruptcy Code, 2016, that makes certain persons ineligible to be a resolution applicant. Those being made ineligible include
a) willful defaulters,
b) those who have their accounts classified as non-performing assets for one year or more and are unable to settle their overdue amounts include interest and charges relating to the account before submission of the resolution plan,
c) those who have executed an enforceable guarantee in favour of a creditor, in respect of a corporate debtor undergoing…
Read the full article at: https://economictimes.indiatimes.com/small-biz/sme-sector/insolvency-ordinance-may-lead-to-greater-cases-of-liquidation-for-smes/articleshow/62190826.cms
