NEW DELHI: To ensure timely completion of the resolution process as well as provide more clarity on rights, the government Wednesday cleared substantial changes to the insolvency law.
As many as seven amendments would be made to the Insolvency and Bankruptcy Code, which is helping in resolution of stressed assets.
The amendments are aimed at filling critical gaps in the corporate insolvency resolution framework while at the same time maximising value from the resolution process, an official release said.
Sources said the changes are expected to lead to timely admission of applications and timely completion of the corporate insolvency resolution process.
The amended Code would also provide greater clarity on the permissibility of corporate restructuring schemes, clarity on rights and duties of authorised representatives of voters, manner of distribution of amounts amongst financial and operational creditors as well as the applicability of the resolution plan on all statutory authorities, they added.
The Cabinet has approved Insolvency and Bankruptcy Code (Amendment) Bill, 2019.
The amendments would "enable the government to ensure maximisation of value of a corporate debtor as a going concern while simultaneously adhering to strict timelines," the release added.