The insolvency watchdog has proposed a raft of regulatory changes, including a two-staged approval process for rescue plans, part-sale of stressed firms and a new mechanism to handle bankruptcy of interconnected entities of a corporate group, to speed up resolutions and prevent the erosion of toxic asset value. In a discussion paper, the Insolvency and Bankruptcy Board of India (IBBI) has suggested that under the two-stage approval process, the financial bid and the basic implementation framework of the resolution plan may be approved early. This would allow the successful resolution applicant to take over the stressed firm and implement the rescue plan early.
Subsequent hearings by the National Company Law Tribunal (NCLT) could address…
