Bankruptcy norms: Knee-jerk reactions to structural deformities

No major jurisdiction grants any preferential treatment to financial creditors in the context of right to participation or voting right in Committee of Creditors

A couple of recent amendments in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, seem to be knee-jerk reactions towards the various issues surfaced in the implementation of the Insolvency and Bankruptcy Code (IBC).
 
On August 16, the Insolvency and Bankruptcy Board of India (IBBI) introduced a concept of “other creditors” in the rules, without providing any corresponding protection or right to such class of creditors in the norms. In a similar vein, the IBBI amended the regulations on October 5 to mandate that a resolution plan shall include a statement as