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CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency

The Insolvency Law Committee examined group insolvency and proposed a framework limited to a particular kind of coordination. Which approach did it recommend for the IBC to begin with?

The Committee recommended procedural coordination first. Group companies already undergoing insolvency would have their proceedings coordinated through measures such as a common bench and a common insolvency professional. Substantive consolidation of assets and liabilities was not proposed as the initial step.

  1. AFull substantive consolidation of the assets and liabilities of all group companies
  2. BA ban on admitting more than one group company into CIRP at the same time
  3. CProcedural coordination of the insolvency proceedings of group companies that are already in CIRP, such as joint hearings and a common insolvency professionalCorrect
  4. DTransfer of all group cases to the Supreme Court

Explanation

The Committee recommended starting with procedural coordination, meaning that proceedings of group companies already in insolvency could be coordinated, for example through a common bench and a common IP. It did not recommend substantive consolidation at the outset. Option 1 is wrong because merging estates was left for later consideration.

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