The financial services sector has been reeling under the pressure of mounting bad assets, including failed restructuring attempts, and the situation seems far from over. The proposed Bill on bankruptcy, consolidating the existing scattered laws relating to insolvency of companies, is a noteworthy move by the government for accelerating the winding up process for defaulting companies and providing a quicker exit route for lenders.
This draft bankruptcy code seems to have been inspired by the quick, equitable and efficient approach of resolution processes established under chapter 7 and 11 of the US bankruptcy code. Similar to chapter 11, the draft bankruptcy code provides for a resolution process where, in essence, it allows comp…
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