Suspension of fresh IBC proceedings, pandemic woes may hit resolution pace for stressed assets
NEW DELHI: Suspension of fresh proceedings under the insolvency law as well as the NCLT and the appellate tribunal switching to virtual hearings due to the coronavirus pandemic seem to have put the brakes on the pace of resolution process for stressed assets and realisation for creditors.
To provide relief for entities impacted by the pandemic, the government has suspended fresh proceedings under the Insolvency and Bankruptcy Code (IBC) starting from March 25, when the nationwide lockdown was imposed to curb spreading of coronavirus infections. The suspension has been extended till March next year.
Suspension of fresh proceedings under the insolvency law as well as the NCLT and the appellate tribunal switching to virtual hearings due to the coronavirus pandemic seem to have put the brakes on the pace of resolution process for stressed assets and realisation for creditors. To provide relief for entities impacted by the pandemic, the government has suspended fresh proceedings under the Insolvency and Bankruptcy Code (IBC) starting from March 25, when the nationwide lockdown was imposed to curb spreading of coronavirus infections. The suspension has been extended till March next year. While the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) are conducting virtual hearings with a new set of standard operating procedures, experts are of the opinion that the pandemic has caused an overall slowdown in the resolution process.