The corporate affairs ministry will seek cabinet approval to amend the Insolvency and Bankruptcy Code of 2016 through a Bill. Here is what the report recommends
New Delhi: The government has placed the report of the 14-member insolvency law committee, chaired by ministry of corporate affairs secretary Injeti Srinivas, in public domain. The report seeks to fine tune the bankruptcy law. The corporate affairs ministry will seek cabinet approval to amend the Insolvency and Bankruptcy Code of 2016 through a Bill. Here is what the report recommends:
■ Treating home buyers as financial creditors will let them take defaulting builders to bankruptcy court
■ Letting lenders to decide on turnaround scheme or liquidation by 66% vote, down from 75%, to speed up decision making
■ Redefining persons disqualified from bidding for bankrupt firm will widen the pool of bidders
■ Rules for interim finance to bankrupt firm will boost market for stressed assets
■ Regulators can’t drag companies to bankruptcy court for defaulting on fees
■ Lenders holding equity from earlier debt recast will not be barred from voting on turnaround scheme
■ Lenders’ action against guarantors to bankrupt firms will not be barred. This will prevent abuse of bankruptcy protection
■ Promoters of bankrupt small businesses should be allowed to bid for the firm if they are not wilful defaulters
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