Valuation Of Assets Under The Insolvency And Bankruptcy Code, 2016: Understanding The Term 'Liquidation Value'

It is crucial for insolvency professionals, and more importantly, for registered valuers, to have a correct understanding of the definition of liquidation value under the Code read with CIRP Regulations

Valuation of assets is one of the core features of the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 (Code). However, there are various clarifications that are yet to be provided by the Insolvency and Bankruptcy Board of India (Board) in relation to provisions pertaining to valuation of assets as provided under the Code and the Regulations. One of the prominent controversies in relation to valuation of assets is the lack of clarity surrounding interpretation of the term ‘liquidation value’ under the Code.