Editorial : 12-05-2018

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Reform bankruptcy Rules, maximise value

The Insolvency and Bankruptcy(दिवालियापन) Board of India’s move (IBBI) to crowd source ideas to amend(संशोधन) an evolving(विकसित/उद्विकासी) regulation is welcome. Novel

ideas, especially from stakeholders(हितधारकों से/जोखिम उठाने वाला), will lead to a more conducive(अनुकूल/सहायक) regulatory framework for swift(तीव्र/शीघ्रगामी) resolution(समाधान/स्थिरता) of corporate distress. The IBBI has said it will modify regulations by April next year, and this is in addition to inviting public comments on its own draft regulations. Rightly, the National Company Law Tribunal too wants a review of the rules to ensure that they are not “misused or mis-interpreted(झूठा अर्थ लगाना/गलत व्याख्या की )”” by resolution professionals. Rules that conflict with the public policy goal of maximising(अधिकतम) the value of the resolution asset must go. Continuous bidding(बोली लगाने) to discover the highest value for the asset being sold must be the norm.

The rule that debars(रोकना/निषेध करना) a promoter from bidding for the company that is being sold either as a going concern or as parts after liquidation(निर्धारण/दिवालियापन/विघटन) is a problem. Those who have their accounts classified as non-performing assets for one year or more, a “connected person” and a related party of “connected persons” are also disqualified from bidding. While the underlying goal of preventing(प्रतिबंध करना/बाधा डालना) those who have wilfully(जान-बूझकर) run their businesses into the ground from regaining(पहुंच जाना) possession of their companies is understandable, the rule has resulted(परिणामस्वरूप) in unforeseen disqualifications sans merit. The stress should be on widening the market for distressed assets(संपत्तियों), not on restricting it. There are other laws in force to prosecute errant promoters. Preference must also be given to a promoter who puts cash upfront. The original bankruptcy code envisaged(परिकल्पना की गई/उल्लिखित) promoter-driven insolvency-resolution plans, proposing repayment of the defaulted loans and claims of other creditors, postponing sale of the asset till after failure to live up to the plan. There is merit in it.

Important Vocabulary

1.Conducive(अनुकूल/सहायक)
Synonyms: helpful, useful, accessory, calculated to produce
Antonyms: useless, worthless, adverse, discouraging, hindering

2.Debars(रोकना/निषेध करना)
Synonyms: blackball, deny, deprive, exclude, forbid
Antonyms: accept, admit, aid, allow, approve

3.Regaining(पहुंच जाना)
Synonyms: achieve, attain, gain, reach, recapture
Antonyms: abandon, fail, forfeit, lose, miss

4.Envisaged(परिकल्पना की गई/उल्लिखित)
Synonyms: anticipate, behold, conceive, conceptualize, contemplate

5.Preventing(प्रतिबंध करना/बाधा डालना)
Synonyms: avert, avoid, bar, block, counter
Antonyms: advance, aid, allow, approve, assist