Navigating real estate insolvencies
Business Standard|November 12, 2024
Insolvency law must prioritize homebuyers' interests without dragging them into the complexities of the resolution process
M S SAHOO & RAGHAV PANDEY
Navigating real estate insolvencies

The Insolvency and Bankruptcy Code, 2016 (IBC), much like insolvency law in any jurisdiction, revolves around the debtor-creditor relationship. Simply put, a creditor is someone who has lent money, while a debtor is someone who has borrowed it. When the debtor fails to service its debt, the insolvency process is triggered. What sets the IBC apart is its classification of creditors into two broad types. The first is financial creditors (FCs), such as banks and financial institutions, that have lent money and, in most cases, charge interest on the amounts lent. The second is operational creditors (OCs), who have not lent money per se but are owed money for goods and services supplied on credit.

This classification serves an important purpose: It delineates distinct rights for the two types of creditors. Both have defined economic rights with claims on the debtor's assets, which will be discussed later. The key difference lies in their political rights: FCs get to sit on the Committee of Creditors (CoC), the primary decision-making body during the IBC process, while OCs do not. The rationale for including only FCs on the CoC is twofold. First, as primarily financial institutions, FCs possess the commercial expertise necessary to make informed decisions about the debtor's future. Second, they are in a better position to restructure the debts owed to them. However, the basis of this classification and the rationale for granting differing rights, though upheld by the Supreme Court, remains debatable, a topic for another day.

Bu hikaye Business Standard dergisinin November 12, 2024 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

Bu hikaye Business Standard dergisinin November 12, 2024 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

BUSINESS STANDARD DERGISINDEN DAHA FAZLA HIKAYETümünü görüntüle
False solutions for climate change
Business Standard

False solutions for climate change

As the ghastly impacts of climate change become more visible in our everyday lives, it is hard to shake off the feeling that one must step up and do something constructive.

time-read
3 dak  |
November 23, 2024
Expats to residents, Delhi's air is driving people out
Business Standard

Expats to residents, Delhi's air is driving people out

Embassies have stepped up efforts to deal with the situation; WFH option has residents temporarily relocating to their hometowns

time-read
3 dak  |
November 23, 2024
Making sense of census
Business Standard

Making sense of census

For all marketing professionals working in large companies, the population census of India is a treasure trove of information.

time-read
3 dak  |
November 23, 2024
MONEY CAN BUY YOU STARS
Business Standard

MONEY CAN BUY YOU STARS

What's behind West Asia's multi-billion charm offensive to become a destination for all kinds of sports stars?

time-read
4 dak  |
November 23, 2024
Business Standard

Ensure low tracking error, alignment with risk appetite

Exchange-traded funds (ETFs) witnessed a sharp rise in subscriptions in October, with net investments totalling ₹13,441 crore, compared to ₹381 crore in the previous month, according to data from the Association of Mutual Funds in India (Amfi).

time-read
2 dak  |
November 23, 2024
Strong order book to stand BEL in good stead
Business Standard

Strong order book to stand BEL in good stead

Brokerages mostly positive on the stock

time-read
2 dak  |
November 23, 2024
Strong Q2, growth outlook drive gains for Info Edge
Business Standard

Strong Q2, growth outlook drive gains for Info Edge

The stock of online classified major Info Edge (India) was up over 6 per cent on Friday on expectations of demand improvement for Indian IT companies.

time-read
2 dak  |
November 23, 2024
Business Standard

Regulator nod to Roshni Nadar to acquire majority stake in HCLTech

The Securities and Exchange Board of India (Sebi) on Friday gave nod to Roshni Nadar to acquire majority shareholding from her father Shiv Nadar, founder of HCL Group, in two promoter group companies.

time-read
1 min  |
November 23, 2024
Green energy stocks fail to benefit from selloff in Adani Green
Business Standard

Green energy stocks fail to benefit from selloff in Adani Green

Six of the eight stocks operating in the green energy space declined on Friday, failing to benefit from the rout in Adani Green Energy's decline over the last two sessions.

time-read
1 min  |
November 23, 2024
Business Standard

NTPC Green Energy IPO booked 2.40x on Day 3

The initial public offering (IPO) of NTPC Green Energy Ltd, the renewable energy arm of NTPC, was subscribed 2.40 times on the closing day of the share sale on Friday.

time-read
1 min  |
November 23, 2024