India Inc gets IBC breather for six months amid coronavirus outbreak

Section 7 of the Code enables financial creditors to start insolvency proceedings against a company, while section 9 gives these powers to an operational creditor

The government has decided to suspend insolvency and bankruptcy proceedings for at least six months owing to challenges businesses are facing due to the Covid-19 pandemic, a senior government official told Business Standard.
 

A new Section is likely to be added to the Insolvency and Bankruptcy Code (IBC). It will suspend Sections 7, 9, and 10, which are used to trigger insolvency proceedings for six months or a period not exceeding one year from the date they commence, the official said.
 

Section 7 of the Code enables financial creditors to start insolvency proceedings against a company while Section 9 gives