BACKGROUND

Background

The Insolvency and Bankruptcy Board of India (IBBI) has on 24 September 2024 published the IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2024 (Amendment Regulations) with the primary aim to streamline and reduce the delays faced in insolvencies containing class of creditors. 

Amendments Introduced

BACKGROUND

When a company is in financial distress, its directors will face difficult choices. Should they trade on to trade out of the company's financial difficulties or should they file for insolvency? If they delay filing and the company goes into administration or liquidation, will the directors be at risk from a wrongful trading claim by the subsequently appointed liquidator? Once in liquidation, will they be held to have separately breached their duties as directors and face a misfeasance claim? If they file precipitously, will creditors complain they did not do enough to save the business?

BACKGROUND

Since its inception the Insolvency and Bankruptcy Code, 2016 (Code) has been an evolving legislation with regular updation(s) being brought about in the form of rules and regulations with a view of streamlining the corporate insolvency resolution process (CIRP).

Introduction

On 23 January 2024, the English Court of Appeal set aside the April 2023 order of the High Court sanctioning the English Part 26A restructuring plan (the “Plan”) proposed by AGPS BondCo plc (the “Plan Company”), a subsidiary of Adler Group SA (Adler Group SA and its subsidiaries being the "Adler Group"). The successful appeal was brought by an ad hoc group of holders of the Adler Group's 2029 notes (the "AHG"). The practical consequences of this decision for the Adler Group's restructuring remain to be seen.

Introduction

The Insolvency and Bankruptcy Board of India (IBBI) on 18 September 2023 notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 (CIRP Amendment Regulations) amending the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations).

The key changes brought about by the CIRP Amendment Regulations are as follows:

Introduction 

The administrators of Avanti Communications Limited (the “Company”) sought directions from the High Court as to whether purported fixed charges in favour of the secured lenders to the satellite operating business should be recharacterised as floating charges (In the matter of Avanti Communications Limited (In administration) [2023] EWHC 940 (Ch)).

Summary of decision