In the five years since Indias bankruptcy code came into force, almost every third company admitted for resolution has faced liquidation.
The number of companies liquidated is more than three times the number where a resolution plan was worked out. A higher level of liquidation is possible because most distressed companies admitted for resolution had turned defunct or ceased operations years ago.
The trend appears to go against the primary objective of the Insolvency and Bankruptcy Code, 2016, which is insolvency resolution. Only upon failure of the corporate insolvency resolution process to yield a resolution plan does the liquidation process commence.
With the role of the liquidator assuming importance in the corporate insolvency p…
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