So far, the insolvency regulations required determination of only the liquidation value of the insolvent company by two registered valuers. Now, these valuers will also have to determine the fair value of the company. Fair value, along with the liquidation value, will have to be provided to the committee of creditors on a confidential basis.
The amendment defines fair value to mean the realisable value of assets of the insolvent company, if they were to be sold between a willing buyer and seller as on the date on which insolvency application has been admitted, on an arms length basis, after proper marketing.
Earlier there was a concern that wide dissemination of liquidation value to applicants caused bids of lower value since bids te…
Read the full article at: https://www.bloombergquint.com/law-and-policy/2018/02/07/insolvency-law-fair-value-made-mandatory-to-get-fairer-bids
