NEW DELHI: India’s insolvency regulator has opened the door to shielding financially sound real estate projects from bankruptcy proceedings against their developers, potentially sparing homebuyers from the consequences of defaults elsewhere in a developer’s portfolio.
Under regulations notified by the Insolvency and Bankruptcy Board of India (IBBI), a committee of creditors (CoC) can recommend that individual projects be excluded from the Corporate Insolvency Resolution Process (CIRP), even when the developer as a whole has entered insolvency proceedings. Any such exclusion will require approval from creditors holding at least 66% of the voting share and clearance from the National Company Law Tribunal (NCLT), as per the notification…