Complication can arise in willful default cases under bankruptcy code

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

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Anand Adhikari
  • 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.    

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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.    

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