The words `liquidation’, `bankruptcy’ and `insolvency’ carry an unmistakable sense of drama -a tone of finality, a sign of unforgiving verdict, and a hint of a new beginning. Amid screaming headlines and flashes of `breaking news’ announcing the start of bankruptcy proceedings against 12 truant corporate borrowers, one is led to believe that the wheels of justice may turn slowly, but they move.
However, the sweeping step masks a more prosaic truth: dragging a company to liquidation can come across as an exemplary punishment to its failed managers and callous (in some cases, unlucky) promoters, but it may not be the best way for banks to salvage lost loans.An official liquidator auctioning the assets one by one would help lenders r…
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