A key hurdle is the stiff requirement for a 90% voting threshold from the committee of creditors (CoC) to approve such a withdrawal, even when a viable insolvency resolution plan is near, they said.
“One of the key challenges is the requirement of a 90% voting threshold from the committee of creditors (CoC), which is often difficult to achieve,” said Shardul Shroff, executive chairman at Shardul Amarchand Mangaldas & Co.
Shroff was pointing to section 12A of the Insolvency and Bankruptcy Code that allows withdrawal of insolvency application against a corporate debtor only with the approval of 90% voting share of the committee of creditors, which is often hard to…