Insolvency and Bankruptcy Hotline
July 09, 2020
Operating without a code: Suspension of IBC okay, but there’s scope for further fine-tuning
This article was originally published in the 23rd June 2020 edition of
Financial Express
On June 5, an Ordinance was promulgated barring initiation of the corporate insolvency resolution process for defaults committed within six months (extendable up to one year) from March 25, 2020. The Ordinance states that no application can ever be filed in respect of such defaults, thereby, giving a permanent immunity to such defaulting companies under the Insolvency Code. Although it was important for the government to provide relief to businesses which have been severely impacted by the pandemic and continue to reel under the global crisis. However, there is a possibility for creditors to still take action against borrowers through other methods and means to recover their dues or prosecute the defaulting companies under other applicable laws or merely defer the requirement for payment beyond the exempted period.
Please click here for an article published in the Financial Express providing a detailed analysis of the Ordinance and its impact on various categories of creditors and borrowers.
Disclaimer
The contents of this hotline should
not be construed as legal opinion. View detailed disclaimer.
This hotline does not constitute a
legal opinion and may contain information generated
using various artificial intelligence (AI) tools or
assistants, including but not limited to our in-house
tool,
NaiDA. We strive to ensure the highest quality and
accuracy of our content and services. Nishith Desai
Associates is committed to the responsible use of AI
tools, maintaining client confidentiality, and adhering
to strict data protection policies to safeguard your
information.
This hotline provides general information
existing at the time of preparation. The Hotline is
intended as a news update and Nishith Desai Associates
neither assumes nor accepts any responsibility for any
loss arising to any person acting or refraining from
acting as a result of any material contained in this
Hotline. It is recommended that professional advice
be taken based on the specific facts and circumstances.
This hotline does not substitute the need to refer to
the original pronouncements.
This is not a spam email. You have
received this email because you have either requested
for it or someone must have suggested your name. Since
India has no anti-spamming law, we refer to the US directive,
which states that a email cannot be considered spam
if it contains the sender's contact information, which
this email does. In case this email doesn't concern
you, please
unsubscribe from mailing list.
|