{"id":3677,"date":"2019-07-19T02:25:19","date_gmt":"2019-07-18T20:55:19","guid":{"rendered":"http:\/\/yourcareerheights.com\/?p=3677"},"modified":"2019-07-19T02:39:25","modified_gmt":"2019-07-18T21:09:25","slug":"cabinet-approves-eight-amendments-to-ibc-for-easier-resolution","status":"publish","type":"post","link":"https:\/\/yourcareerheights.com\/?p=3677","title":{"rendered":"Cabinet approves seven amendments to IBC for easier resolution"},"content":{"rendered":"<div id=\"pl-3677\"  class=\"panel-layout\" ><div id=\"pg-3677-0\"  class=\"panel-grid panel-no-style\" ><div id=\"pgc-3677-0-0\"  class=\"panel-grid-cell\" ><div id=\"panel-3677-0-0-0\" class=\"so-panel widget widget_sow-editor panel-first-child\" data-index=\"0\" ><div class=\"panel-widget-style panel-widget-style-for-3677-0-0-0\" ><div\n\t\t\t\n\t\t\tclass=\"so-widget-sow-editor so-widget-sow-editor-base\"\n\t\t\t\n\t\t>\n<div class=\"siteorigin-widget-tinymce textwidget\">\n\t<div class=\"story_kicker\">\n<h3><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium\" src=\"https:\/\/i0.wp.com\/images.livemint.com\/img\/2019\/07\/17\/original\/KCQTLC7B_1563387123329.png?resize=700%2C542&#038;ssl=1\" alt=\"Insolvency &amp; Bankcruptcy Code Ammendments\" width=\"700\" height=\"542\" \/><span style=\"color: #993366;\">The Union Cabinet cleared seven amendments to the Insolvency and Bankruptcy Code (IBC) during its meeting on Wednesday 17th July\u00a0 which will allow the government to stick to strict timelines, and simultaneously, maximise the value of an insolvent entity from the resolution plan as a going concern.<\/span><\/h3>\n<article id=\"article_1563361095180\">\n<ul class=\"highlights\">\n<li><span style=\"color: #993366;\"><strong>The amendments will also aid decision-making in the case of bankrupt entities such as property developers.<\/strong><\/span><\/li>\n<li><span style=\"color: #993366;\"><strong>The amendments aim to fill the critical gaps in the country\u2019s corporate rescue framework, says the government.<\/strong><\/span><\/li>\n<\/ul>\n<p><span style=\"color: #993366;\">The amendments are aimed at speeding up the bankruptcy resolution process that has been mired in litigation and correcting anomalies that have crept into its functioning since the law came into force in 2016.<\/span><\/p>\n<p><span style=\"color: #993366;\">Promoters of large bankrupt companies have been steadfastly resisting loss of control over their business by challenging decisions of lenders and bankruptcy tribunals in higher courts.<\/span><\/p>\n<p><span style=\"color: #993366;\">The eight amendments to the\u00a0<a style=\"color: #993366;\" href=\"https:\/\/www.livemint.com\/budget\/economic-survey\/small-firms-using-bankruptcy-code-to-make-large-customers-pay-back-dues-economic-survey-1562232715359.html\" target=\"_blank\" rel=\"noopener\">Insolvency and Bankruptcy Code<\/a>(IBC) will also aid decision-making in the case of bankrupt entities such as property developers, which have a large number of creditors, including homebuyers.<\/span><\/p>\n<p><span style=\"color: #993366;\">Most important among these amendments, Cabinet cleared that the resolution process has to be completed within 330 days, including litigations and other judicial process. Presently, the resolution plan for an insolvent company has to be cleared within 270 days.\u00a0Once the proposed amendments are cleared by Parliament, the clock will be ticking even during litigation, said Injeti Srinivas, secretary in the ministry of corporate affairs.<\/span><\/p>\n<p><span style=\"color: #993366;\">Another important amendment approved by the Union Cabinet clarifies the rights of financial as well as operational creditors who have not spoken in favour of a resolution. The amendment proposes that they will be paid as per their hierarchy specified in the IBC. The Code gives the highest priority to those who have brought interim finance to meet the costs of resolution or liquidation, followed by dues to workers for the past two years and dues to secured creditors in equal priority. Employees other than workmen, and unsecured creditors and operational creditors are further down the line in the priority of receiving resolution or liquidation proceeds.<\/span><\/p>\n<p><span style=\"color: #993366;\">Another crucial amendment to the IBC approved by the Cabinet mandates that the bankruptcy resolution or liquidation decided under the bankruptcy framework is binding on central, state and local governments, to whom the insolvent company owes dues.\u00a0This will prevent state authorities including income tax officials from questioning a rescue plan adopted in a court-monitored process.<\/span><\/p>\n<p><span style=\"color: #993366;\">The amendments proposed also rework voting rights in the case of companies where there are a large number of creditors such as homebuyers and bondholders. The idea is to make decision-making easier even if a large number of them do not take part in voting. According to the new formula, if more than half of these creditors who are present approve a plan, it will be considered that the entire class of creditors has approved it.<\/span><\/p>\n<p>Source: Live Mint, Business Today<\/p>\n<p>&nbsp;<\/p>\n<\/article>\n<div class=\"clearfix socialHolder Gplus\"><\/div>\n<\/div>\n<\/div>\n<\/div><\/div><\/div><div id=\"panel-3677-0-0-1\" class=\"so-panel widget widget_sow-video panel-last-child\" data-index=\"1\" ><div class=\"panel-widget-style panel-widget-style-for-3677-0-0-1\" ><div\n\t\t\t\n\t\t\tclass=\"so-widget-sow-video so-widget-sow-video-default-c08170c47cfb-3677\"\n\t\t\t\n\t\t><h3 class=\"widget-title\">What is the Insolvency &amp; Bankruptcy Code, and why Modi govt's changes to it are bold ? - Shekhar Gupta - The Print<\/h3>\n<div class=\"sow-video-wrapper\n\">\n\t\t\t<iframe loading=\"lazy\" title=\"What is the Insolvency &amp; Bankruptcy Code, and why Modi govt&#039;s changes to it are bold | ep 216\" width=\"700\" height=\"394\" src=\"https:\/\/www.youtube.com\/embed\/3fV2p5Zc-a8?feature=oembed&enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen allowfullscreen mozallowfullscreen webkitallowfullscreen sandbox=\"allow-scripts allow-same-origin allow-presentation\"><\/iframe>\t<\/div>\n<\/div><\/div><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>The Union Cabinet cleared seven amendments to the Insolvency and Bankruptcy Code (IBC) during its meeting on Wednesday 17th July\u00a0 which will allow the government to stick to strict timelines, and simultaneously, maximise the value of an insolvent entity from the resolution plan as a going concern. The amendments will also aid decision-making in the&hellip;<\/p>\n","protected":false},"author":1,"featured_media":3678,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,295,80,524],"tags":[35,677,588,347],"class_list":["post-3677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-insolvency-and-bankruptcy-code","category-npa","category-npa-banking","tag-economy","tag-insolvency-and-bankcruptcy-code","tag-ministry-of-corporate-affairs","tag-nclt"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/yourcareerheights.com\/wp-content\/uploads\/2019\/07\/Insolvency-Bankcruptcy.jpg?fit=660%2C450&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/3677","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3677"}],"version-history":[{"count":5,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/3677\/revisions"}],"predecessor-version":[{"id":3683,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/3677\/revisions\/3683"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/media\/3678"}],"wp:attachment":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3677"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3677"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3677"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}