Directors of companies facing the insolvency process cannot go unscathed while the companies they ran are hauled over the coals.
For the first time ever, insolvency regulator IBBI has warned of action under the Insolvency and Bankruptcy Code (IBC) against those directors who failed to discharge their duties in the interest of the creditors during the twilight zone period.
The twilight zone refers to a look-back period: it can be a few months to a few years before commencement of the insolvency process. The twilight period is not defined in the IBC.
Solely because the powers of a companys board are suspended once the insolvency process is initiated, it does not follow that the directors would be absolved of their actions in the run-up to t…
Read the full article at: https://www.thehindubusinessline.com/economy/policy/insolvency-law-ibbi-chief-puts-india-incs-directors-on-notice/article23437130.ece
