Insolvency board opens door to part sale of bankrupt firms

NCLT data shows creditors are likely to recover over ₹67,000 cr from 284 cases of bankrupt firms during FY25

- Gireesh Chandra Prasad

The Insolvency and Bankruptcy Board of India (IBBI) has allowed administrators of bankrupt companies to sell these entities either as a whole or their assets individually, in a move that gives a great deal of flexibility in debt resolution.

While amending the regulations, IBBI said this has to be done with the approval of creditors to the company.

Amendments to the 2016 corporate insolvency resolution regulations published on Wednesday said the professional representative of creditors running the bankrupt business may, with the approval of creditors, invite debt resolution plans for the corporate debtor as a whole, or bids for sale of one or more of its assets or for both.

That implies creditors need not waste time by first calling for bids for a company as a whole and if no investor shows interest, then proceed for asset sale.