The Insolvency and Bankruptcy Board of India (IBBI) has proposed a statutory mechanism that will allow a company to withdraw from the process of voluntary liquidation at any point after its initiation.
Unlike the corporate insolvency resolution and liquidation process of a stressed company, voluntary liquidations are not supervised by a committee of creditors or a stakeholders consultation committee.
In the absence of such rules, there were concerns that certain corporate persons may be abusing the process and closing the liquidation process on their own without informing the adjudicating authority.
The IBBI said, The proposed amendment provides an orderly framework for withdrawal from the process, by way of insertion of new regula…
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