9,826.15245.85
Stock Analysis, IPO, Mutual Funds, Bonds & More

Lockdown period won’t be counted in IBC timelines

National Company Law Tribunal (NCLT) had recently allowed 90 days extension for the resolution process of Jet Airways while in the case of RCom, lenders have approved the resolution plan currently submitted to the tribunal for its approval.

, ET Bureau|
Last Updated: Mar 31, 2020, 11.29 AM IST
0Comments
Agencies
1
IBBI has issued a fresh regulation to amend the IBBI Regulations, 2016, which will come into effect from Sunday.
MUMBAI: The lockdown period will not be counted in the timeline set to finalise resolution plans for stressed companies under the insolvency process, the Insolvency & Bankruptcy Board of India has said, providing in a breather for lenders, bidders and resolution professionals.

“The period of lockdown imposed by the central government in the wake of the Covid-19 outbreak shall not be counted for the purposes of the timeline for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process,” IBBI said in a notification on Sunday. “This would, however, be subject to the overall time-limit provided in the code.”

About 2,000 companies are currently undergoing resolution process under the Insolvency and Bankruptcy Code (IBC), including Jet Airways, Reliance Communications, Videocon Group and Lavasa.

The board has taken a view that It is difficult for the resolution professional (RP) to continue to conduct the process, for members of the committee of creditors (CoC) to attend the meetings, and for bidders to submit resolution plans, during the period of lockdown. Hence the decision to exclude the lockdown period from timeline for resolution process.
ibc-graph
“The Government is well aware of the issues faced by various stakeholders and is also conscious of uncertainty created by COVID – 19 situation,” said Raj Panchmatia, Partner at Khaitan & Co. “It is actively taking steps to alleviate any hardship that may have been created. Bringing this specific amendment is all the more relevant given the strict timelines under the Code and to also address the issues faced by the stakeholders due to lockdown.”

National Company Law Tribunal (NCLT) had recently allowed 90 days extension for the resolution process of Jet Airways while in the case of RCom lenders have approved the resolution plan currently submitted to the tribunal for its approval.

Ashish Pyasi, partner at law firm Dhir & Dhir, said the IBBI move deals with only a part of the issue because it does not consider the outer timelines of 270 and 330 days provided in the IBC. “This regulation is subject to the provisions of the code, so the timelines for various activities in the process will be extended, but what about the outer limits?” he said.
Pyasi said the Supreme Court had, in the matter of Essar Steel, held that the timeline of 330 days can be extended in exceptional circumstances. “It will be better if some more clarity comes on the outer limits and the timelines within the process by either amending the code or special enactment to deal with timelines in all the laws,” he said.







(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

Also Read

Is it lockdown for startups?

Picking the right lockdown target

Devita Saraf gives the lockdown mantra for entrepreneurs to survive the lockdown crisis

Lockdown, Day 47: Homecoming

Lockdown partially eased in Assam

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service