Rising litigation mars debt resolution under Insolvency and Bankruptcy Code

Essar Steel, Bhushan Power & Steel bidders may go to court

With bidders and owners of companies that defaulted on debt repayments complaining of arbitrary use and interpretations of the Insolvency and Bankruptcy Code (IBC) by insolvency resolution professionals (IRPs) and lenders, more cases relating to non-performing assets (NPAs) resolution are likely to head to court. 

While the resolution process of Binani Cement, Videocon Industries, and Jaypee is in court, the next round of litigation is expected in the bidding process of Bhushan Power & Steel and Essar Steel.

“Most of these cases will be appealed in the Supreme Court as the interpretation of the code is different in most cases.