Resolution of stressed assets under insolvency and bankruptcy code 2016
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What is the primary objective of the Insolvency and Bankruptcy Code, 2016 (IBC)?
The IBC aims to consolidate and amend laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner. It maximises value of assets and promotes entrepreneurship while balancing the interests of all stakeholders.
What is the full form of IBC as used in banking and insolvency law?
Insolvency and Bankruptcy Code, enacted in 2016.
Which authority adjudicates insolvency resolution of corporate debtors under IBC 2016?
The National Company Law Tribunal (NCLT) is the adjudicating authority for corporate insolvency resolution, while the Debt Recovery Tribunal (DRT) handles insolvency of individuals and partnership firms.
Which court handles insolvency cases of individuals and partnership firms under IBC?
Debt Recovery Tribunal (DRT) adjudicates individual insolvency cases.
What is the minimum default threshold for initiating Corporate Insolvency Resolution Process (CIRP) under IBC?
The minimum default amount required to trigger CIRP is Rs. 1 crore, as revised by the government in March 2020. Initially it was Rs. 1 lakh at the time of enactment of IBC 2016.
What is the maximum time allowed for CIRP including litigation extensions under IBC?
330 days including court-ordered extensions is the outer limit.
Who can initiate the Corporate Insolvency Resolution Process (CIRP) under IBC 2016?
CIRP can be initiated by a financial creditor, operational creditor, or the corporate debtor itself upon occurrence of a default. Financial creditors file under Section 7, operational creditors under Section 9, and corporate debtors under Section 10.
What percentage of CoC votes is required to approve a resolution plan under IBC?
66% voting share of financial creditors is required for approval.
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