Bankrupt MSME promoters may be allowed to bid for their companies

Homebuyers likely to be termed creditor, cooling off period possible

The insolvency law committee, headed by the Ministry of Corporate Affairs Secretary Injeti Srinivas, is expected to suggest significant changes in the Insolvency and Bankruptcy Act. 

The 14-member expert panel is looking at allowing promoters of micro, small & medium enterprises (MSMEs) undergoing resolution to bid for their own companies, a source said. The expert panel is also likely to provide clarity on whether homebuyers can be treated as creditors. The need for cross-border insolvency is also being deliberated. In addition, the committee would remove any ambiguity around the definition of “connected person” and “related party” in the recently amended Insolvency