Bankruptcy rescues have soared this year. Here is why
₹3.2 trillion, which is more than the fair value of the assets of ₹2.97 trillion, although it is less than their total claims of ₹10 trillion. The second official said once resolution professionals get tribunal orders to recover dues from corporate guarantors—mostly promoters of defaulting companies—the amounts that creditors realize under IBC will see a sharp jump.
The path has been cleared for this by the Supreme Court, when it upheld the constitutional validity of insolvency resolution of personal guarantors last November, the person added. Meanwhile, the number of corporate turnaround plans approved so far this year has gone up from about 42 in the June quarter to more than 80 in each of the September and December quarters, data available from IBBI showed.
“Increasingly, resolution plans which do not have too much complexity are being cleared proactively in several benches," said Anoop Rawat, partner (insolvency and bankruptcy) at law firm Shardul Amarchand Mangaldas & Co. “Infusing similar efficiency in admission of cases will help in making IBC more effective in addressing distress in the corporate sector." Experts said capital and efficient management are key elements of the revival of stressed assets under IBC, but many strategic investors that are looking to buy stressed assets face the challenge of finding a suitable asset due to key information not being available.
Most prospective resolution applicants, who are not already informed about the company, will not be able to form a view on whether to submit an expression of interest (EoI) in response to the information in Form G (invitation for EoI), explained Vishwas Panjiar, Partner, Nangia Andersen Llp, a business advisory firm. Panjiar said it is also
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