A third of withdrawn insolvency processes fully settled, says IBBI

Over one-third of the corporate insolvency resolution processes that were withdrawn after admission resulted in full settlement with the creditor who filed the insolvency application, the latest data by the Insolvency and Bankruptcy Board of India (IBBI) shows. A total of 1,035 applications have been withdrawn under the Insolvency and Bankruptcy Code (IBC) process after admission till December 2023.

IBBI said that the credible threat of the code that a company may change hands has changed the behaviour of debtors.

“Thousands of debtors are resolving distress in early stages of distress. They are resolving when default is imminent…making best efforts to avoid consequences of the resolution process,” IBBI said in its newsletter.

 

The IBBI newsletter for the October-December 2023 period said that more than three-fourths of the Corporate Insolvency Resolution Processes (CIRPs) withdrawn after admission had claims of less than Rs 10 crore. One per cent had claims of over Rs 1,000 crore.