Insolvency and Bankruptcy Board of India (IBBI) data shows that, as of September 2022, creditors had realised INR2.43 trillion (USD 29.97 billion) of the INR7.19 trillion claimed through the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (code). Creditors have, therefore, taken an average haircut of 69 per cent. Clearly, the codes objective of maximising value for all stakeholders is still a distant dream.
The code defines transactions undertaken by a corporate debtors former management that the resolution professional (RP) or liquidator may avoid as those that were preferential, undervalued, extortionate or undertaken to defraud creditors or for fraudulent purposes. The IBBIs consultatio…
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