Introduction

Introduction

1 EXPLORING THE ROLE OF SECTORAL REGULATORS VIS-À-VIS IBC The Insolvency and Bankruptcy Code, 2016 (“IBC” / “Code”) has emerged as the poster child of an ideal model law empowering the restructuring and resolution of financially distressed firms in a fair, timely and balanced manner by maximising recoveries to the debtors claimants.1 The corporate insolvency resolution process (“CIRP”) under the Code essentially functions in a manner as per which a resolution plan is proposed for all stakeholders of the debtor, ideally within an outer timeline of 330 days.2 The creditors and stakeholders ar

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

In a recent legal development that underscores the intricate interplay between federal bankruptcy law and the cannabis industry, a court case has emerged involving a bankruptcy filing by an employee of a cannabis company. It’s well established that, because cannabis is generally considered a controlled substance under the federal Controlled Substances Act (CSA), certain cannabis related companies are precluded from obtaining debt relief through bankruptcy. Now individuals employed by cannabis companies might find themselves in the same boat. In Blumsack v. Harrington, 2024 Bankr.

On September 20, 2023, the U.S. Bankruptcy Court for the Central District of California (“Court”) confirmed a plan for a cannabis-related business (“Debtor”) to sell its equity interests in a Canadian cannabis company, Lowell Farms, and distribute the proceeds to its creditors.

As the cannabis industry matures, there will be winners and losers. Losers lack access to the U.S. Bankruptcy Code. Marijuana related assets cannot be sold free and clear of liens and encumbrances via the tried and true bankruptcy section 363 sale, which leaves the loser’s creditors without the best tool to maximize the value of the loser’s assets, and deprives acquirers of a federal court order conveying assets. What’s the state of play, and what’s the alternative for the losers, their creditors, and the companies that would acquire them?

STATE OF PLAY