Event Highlights : INSOL India and IBBI's International Conclave,2024

??"Every dollar matters and every dollar needs to work as hard as possible"

-Scott Atkins ??

What an extraordinary time at " INSOL India & Insolvency & Bankruptcy Board of India (IBBI) 's International Conclave,2024 on the theme Looking Ahead Insolvency and Bankruptcy Code, 2016" ! ?? The enthusiasm, valuable insights, and meaningful connections forged during this event have left an indelible mark.Here are some key highlights that made it exceptional :

?? Out of court and hybrid mechanisms of Restructuring (Mediation, Pre-insolvency, Schemes and Pre-packs): Comparative analysis -

Panel 1 : Mr. Abizer Diwanji sir ,Mr. Sumant Batra sir, Mr. Scott Atkins sir, Mr. Sushil Nair sir and Mr. Avinash Kulkarni sir.

Strategic Debt Restructuring (SDR) issued through the circulars of RBI existed prior to the enactment of the code which is essentially an out of court mechanism but what it lacked was the mechanism for the creditors to reach a consensus which IBC is able to achieve. An Insolvency regime is extremely important for India to reach the 5 trillion economy. Although debtor in possession model is not envisaged by the code, S.240A has provided the exception for the operation of S.29A (c) to (h) on MSMEs to promote out of court settlements. For Pre-Packs to efficiently work in India it has to be regulated less and supervised more. One question posed by Abizer Diwanji to the creditors community is " How many of our FCs would actually want to initiate a Pre-Pack process before a default ?"

?? Group Insolvency -

Panel 2: Mr. Ashish Chhawchharia sir, Ms. Tine Abraham ma'am, Mr. Gaurav Gupte sir, Mr. Sandip Garg sir, and Mr. Ilya Kokorin sir.

The IBC provides framework for resolution and liquidation of CD on a standalone basis but does not expressly deal with the insolvency proceedings of different CDs in the same group. Although S.18(1) (g)(b) and S.36(4) exclude the assets of the subsidiaries from the assets of the CD, there exists business activities that are integrated in a group structure comprising of its subsidiaries and associate companies. The working group committee report on group insolvency was elaborately discussed where the definition of "group" was also deliberated. Substantial consolidation to happen not only requires ownership and control but also the question of entities forming a single economic enterprise also needs to be assessed. A prescriptive solution for the definition of "group" is difficult to achieve.

?? Insolvency in Asset Lean/ Services sector Insolvency -

Panel 3: Mr. Nilang T. Desai sir ,Mr. Richard Heis sir ,Ms. Sheila Ng ma'am and Mr. Ashwin Bishnoi sir.

Land and Fixed assets are limited as India grows as an economy, the phase of evolution is going to be around asset-light companies like services and technology. Responding to the pandemic, the implementation of Pre-Pack Insolvency Resolution process not only helped MSMEs but also the asset lean service-sector. While analysing the present cases, any resolution applicant(RA) who is interested in asset lean service sector companies shows such eagerness either for entering into the business of the CD or for its brand value. Therefore it is the duty of RP to preserve the brand value of the CD for maximisation of the value of such companies.

?? Ease of Compliances: Disclosures by IPs -

Panel 4: Mr. Anoop Rawat sir, Ms. POOJA BAHRY ma'am, Mr. Udayraj Patwardhan sir, Mr. Santosh Shukla sir, Mr. Avil Menezes sir, and Mr. Rahul Madan sir.

To make the both commercial and quasi-judicial compliances of Insolvency Professionals in a more streamlined and less burdensome manner an online portal is discussed to be implemented to increase the ease of compliances. The two contentious cases of Jharkhand and New Delhi High courts on the question of whether RP is a Public Servant or not is also discussed which needs clarity from the apex court. A mere character of public duty is not sufficient for RP to become a public servant.

?? Funding Insolvency Estate: Litigation Funding -

Panel 5: Mr. Pooja Mahajan ma'am, Mr. Ritin Rai sir,Mr. Joe Durkin sir , Mr. Jithesh John sir, Mr. Arvind Manoosegaran sir.

Litigation funding has no statutory or regulatory provision around it but in the event of insolvency, litigation funding helps in value maximisation. Litigation funding can be called as interim finance without being interim finance. The best advantage of litigation funding can be derived while pursuing Avoidance transactions and NRRA under Reg. 37(A) of Liquidation Regulations. Litigation finance also improves the chances of resolution as the RP can then free up his mind and focus on the company's revival. The awareness of Litigation funding and its advantages needs further propagation in India and regulation of the same has to be put in place.

In conclusion, the achievement of India's aspiration to be the third largest economy in the world can be catalyzed through efficient functioning of IBC. The code not only removes NPA's from the balance sheets of the banks but also helps in increasing the credit infrastructure in India as pointed out by Mr. Dinkar Venkatasubramanian Sir. Approximately, 273 resolution plans are approved till the day before as highlighted by Retd. Hon'ble Cheif Justice Ramalingam Sudhakar. The Code is evolving rapidly and looking ahead lies a vibrant and dynamic economy.