Complication can arise in willful default cases under bankruptcy code
The ordinance also paves the way for new team to take over and turnaround the company. But there is likely to be complications in willful defaulters cases
- Nov 23, 2017,
- Updated Nov 23, 2017 5:56 PM IST
The government has moved an ordinance for debarring willful defaulters from bidding for distressed assets under the new bankruptcy code. This is a good measure to keep the rogue promoters away. This also paves the way for new team to take over and turnaround the company. But there is likely to be complications in willful defaulters cases.Most of the willful default cases get challenged in the court. If a promoter is debarred from bidding for an asset under the bankruptcy code, he will certainly apply for a stay order on certain grounds. This will only delay the process.
The government has moved an ordinance for debarring willful defaulters from bidding for distressed assets under the new bankruptcy code. This is a good measure to keep the rogue promoters away. This also paves the way for new team to take over and turnaround the company. But there is likely to be complications in willful defaulters cases.Most of the willful default cases get challenged in the court. If a promoter is debarred from bidding for an asset under the bankruptcy code, he will certainly apply for a stay order on certain grounds. This will only delay the process.