The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 seeks to reduce delays, maximise value for all stakeholders, and introduce new provisions that follow global best practices for resolving insolvency.
Key Highlights of the Bill
- Expediting Resolution and Reducing Delays
- Mandatory NCLT Timelines: Mandate National Company Law Tribunal (NCLT) to admit an insolvency case within 14 days and approve a resolution plan within 30 days.
- Out-of-Court Creditor-initiated resolution: To facilitate faster and more cost-effective insolvency resolution, with minimal business disruption and help ease the burden on judicial systems.
- Maximizing Value and Protecting Stakeholder Interests
- Restoring Corporate Insolvency Resolution Process (CIRP): NCLT can restore CIRP once in exceptional cases if no resolution plan is approved or if a plan is rejected, given a request from the Committee of Creditors (CoC).
- Enhancing Governance and Compliance
- Group Insolvency Framework: Introduces a "voluntary group insolvency framework" to facilitate joint resolution of stressed entities within a domestic corporate group, recognizing their interconnected nature.
- Cross-Border Insolvency Framework: Proposes a basic structure for cross-border insolvency enabling easier access for creditors to overseas assets of stressed companies and aligning with international best practices.
- Clean Slate Principle Reinforcement: Explicitly reinforces the "clean-slate principle," stating that once a resolution plan is approved, claims against the corporate debtor are extinguished (unless specified otherwise).
About Insolvency and Bankruptcy Code, 2016
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