Despite a gradual increase in the claims under the Insolvency and Bankruptcy Code (IBC), operational creditors (OCs) continue to receive a minimal share of the proceeds of resolution as well as liquidation.
As per the latest IBBI newsletter, OCs received merely 0.88% of the total amount claimed during the liquidation of a stressed asset. The relative share of OCs is not very different in cases of corporate insolvency resolution process (cases that haven’t slipped into liquidation), sources said, but that data is not publicly available.
This underscores a significant gap in the IBC’s framework when it comes to safeguarding the interests of operational creditors, analysts said. The OCs have been receiving less than 1% of the total…
