Indian counsel reveal Bankruptcy Code wishlist

Author: Ashley Lee | Published: 25 Mar 2015

India’s finance minister Arun Jaitley proposed the introduction of a Bankruptcy Code during his budget speech, earlier this month. The market has now outlined what it wants to see in the final rules.

India lacks a unified bankruptcy code to manage the restructuring or liquidation of distressed companies. Instead companies have restructured their debt under various regimes available.

In the budget speech Jaitley said that the government would introduce a comprehensive Bankruptcy Code in the fiscal year of 2015-16, consistent with the UNCITRAL model.

"I find the proposed introduction of a comprehensive bankruptcy law very exciting and long overdue in India," said Pallavi Gopinath-Aney, managing associate at Linklaters.

It’s needed to determine how international and domestic lenders, bondholders and secured and unsecured creditors come together in restructurings, she added.

Existing regimes including corporate debt restructuring (CDR), the Securitization and Reconstruction of Financial Assets and Enforcement of Security (Sarfaesi)...