The cross-border insolvency framework released for discussions encompasses authorities across jurisdictions pertaining to insolvency proceedings of any single corporate debtor.
Currently several multinational companies (MNCs) hold their assets in foreign jurisdictions through subsidiaries which are distinct legal entities. Consequently, the commencement of insolvency proceedings for any single company cannot be extended to all its group companies under the proposed legal framework.
What is required is to promote effective group companies insolvency by consolidating companies within a group and allowing restructuring of the groups assets and liabilities as though only one entity existed.
This is possible by permitting insolvency proceedin…
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