An IBBI official said on Saturday that the goal of an insolvency resolution plan should be to maximise the value of the firm involved, not only to recover debts or liquidate the company. The Insolvency and Bankruptcy Board of India (IBBI) is a significant player in putting the Insolvency and Bankruptcy Code into practice (IBC).
IBBI Executive Director Santosh Kumar Shukla, speaking at an event organised by industry association Assocham, said that the recovery of enterprises in financial distress requires a collaborative effort from all stakeholders, not just insolvency practitioners.
"While we must give full credit to the insolvency professionals' role and responsibility in developing a resolution package, other stakeholders such as the committee of creditors and even ex-management have an important role to play."
In an Assocham announcement, Shukla was reported as saying, "The focus should be to maximise the value of the business and not just to recover the dues or liquidate the company.”
Madan Balachandra Gosavi, Member (Judicial) of the National Company Law Tribunal (NCLT), said that during the resolution of a company, the creditors' committee should not only look at maximising their recovery or going into compulsory liquidation to recover their dues but also ensure that the company is operational again.
He also recognised the importance of resolution specialists during the insolvency process, noting that resolution professionals have been targeted for assassination in the past. According to the statement, "There have been cases where the ex-management too, has tried to get them intimidated in false criminal cases.”
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