Parliament Passes Bill to Amend Insolvency and Bankruptcy Code

The Parliament on Monday passed a bill that temporarily suspends initiation of corporate insolvency resolution process under the IBC, for a period not exceeding one year from March 25, to provide relief to companies affected by COVID-19 to recover from the financial stress, Big News reported. The Lok Sabha passed the Insolvency and Bankruptcy Code (Second Amendment) Bill 2020 after a reply by Finance and Corporate Affairs Minister Nirmala Sitharaman. The bill had earlier been passed by the Rajya Sabha and will replace an ordinance brought by the government. The benefit of the suspension will be available to all defaults of the corporate debtor that occur from March 25, 2020 till the end of the period of suspension. Sitharaman said the government had to prevent any company which is experiencing stress because of COVID-19 getting or being pushed into insolvency proceedings and an ordinance was brought. Read more