Many of the changes to the Insolvency and Bankruptcy Code (IBC), proposed in the Bill tabled in the Lok Sabha on Tuesday, were long overdue. To be sure, the corporate insolvency resolution process (CIRP) has been amended from time to time to plug loopholes—it was amended six times in the first five years. However, the mechanism continued to suffer from infirmities and, as was highlighted by the Supreme Court in its recent order in the Bhushan Steel-JSW Steel case, resolutions have come about at the cost of regulatory compliance. Among the key changes this time around is the introduction of a creditor-led resolution process which can be kicked off provided 51% of the financial creditors, by value, concur.
Insolvency Guardian
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