“Necessary amendments in the Code will be carried out to enhance the efficacy of the resolution process and facilitate cross border insolvency resolution,” Sitharaman said.
The minister also said the Centre for Processing Accelerated Corporate Exit (C-PACE), will be established to facilitate and speed up the voluntary winding-up of companies from the currently required 2 years to less than 6 months.
“A detailed statutory mechanism for resolution of Cross border insolvency would help in tackling the complex insolvency cases of groups having presence in different jurisdictions and would maximise value for all stakeholders,” said Anoop Rawat, Partner, Shardul Amarchand Mangaldas & Co.
While the Insolvency and Bankruptcy Code has significantly changed the insolvency landscape, the timelines for admission and resolution of cases has remained wanting.
“The ambiguities in the IBC on rights and priority of secured creditors as well as dissenting creditors need to be clarified,” said Aashit Shah, Partner, J Sagar Associates. “The resolution process is a bit prescriptive in certain situations such as limiting the number of amendments to the resolution plan. Changes or clarification in some of these areas will help make the IBC more effective. An IT based accelerated system for voluntary winding up will assist companies to exit operations and help to significantly reduce the present delays in winding up.”
