Author: CS Chirag Makwana
Published in: ICSI(kolkata)
The Insolvency and Bankruptcy Code (IBC), 2016 marked a transformative reform in India, creating a consolidated, time-bound framework to resolve distressed companies while maximizing value and balancing stakeholder interests. Initially, it addressed fragmented pre-IBC mechanisms, shifting control from debtors to creditors, and enabling landmark resolutions such as Essar Steel. Over nearly a decade, challenges like prolonged timelines, limited bidders, rising litigation, and frequent liquidations have emerged. The next phase of the IBC emphasizes redefining resolution from a procedural exercise to a dynamic, market-based process, incorporating pre-pack insolvency, early-warning systems, group insolvency frameworks, cross-border coordination, and technological integration. Encouraging diverse resolution applicants and distressed asset investors, streamlining tribunals, and ensuring equitable treatment of operational and financial creditors are central. The Code’s evolution aims to transform insolvency into a proactive engine for economic revival, preserving enterprise value, safeguarding jobs, and aligning India with global insolvency standards.
