MUMBAI/KOLKATA: Debt resolution for smaller companies may see higher challenges and number of companies going for liquidation may rise once the proposed changes to the Insolvency and Bankruptcy Code (IBC) become a law, resolution professionals dealing with smaller companies said.
The proposed law may prevent wilful defaulter from buying out their their own units post bankruptcy proceedings. This may lead to more liquidation as external investors in general are not very keen to bid for smaller firms which typically lack corporate governance and internal controls.
“The ordinance will strengthen the new law especially for larger companies under insolvency proceedings, but it will be difficult to find investors or alternativ…
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