Asset pool for creditors to expand with changes to IBC

The Insolvency and Bankruptcy Code (IBC) is set to undergo changes that will expand the asset pool for creditors to bankrupt companies, allowing them to access a wider range of valuable assets and potentially claw back money from shady promoter transactions. According to Soumitra Majumdar, partner at JSA Advocates & Solicitors, the proposed amendments provide much-needed clarity on treatment of avoidance transactions and resultant assets, aiming to build certainty of recovery and flexibility in disposal methods of assets. This move is expected to enhance creditor and stakeholder recoveries by efficiently monetizing assets. The changes will also extend the timeline to tag dubious pre-bankruptcy transactions as avoidance transactions that can be reversed by tribunals. Read Article