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

The Insolvency Law Committee's approach to group insolvency in its 2018 report was to recommend, in the first instance, which of the following for group companies in separate CIRPs?

The Committee recommended procedural coordination, such as hearing group cases before a common bench and appointing a common insolvency professional, while preserving each company's separate legal identity. It did not recommend substantive consolidation of assets and liabilities as the initial approach.

  1. ASubstantive consolidation of all group assets and liabilities
  2. BProcedural coordination, such as a common bench and the same insolvency professional, while keeping entities legally separateCorrect
  3. CAutomatic liquidation of all group companies
  4. DTransfer of all proceedings to the High Court

Explanation

The Committee preferred procedural coordination (for example, a common NCLT bench and possibly a common IP) and left each entity's separate legal identity intact. Substantive consolidation pools assets and was not recommended as a first step, so option A is wrong.

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