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Most claims liquidated in National Company Law Tribunal amid delays

Most claims liquidated in National Company Law Tribunal amid delays

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  1 May 2019 10:38 AM GMT

New Delhi: Amid the rising number of cases admitted to the National Company Law Tribunal (NCLT), a Kotak report on Tuesday said that liquidation remained the most favourable closure for all the admitted claims under the insolvency resolution process. The report noted that nearly half of the ongoing cases have crossed 270 days since admission, which reflected poorly on the state of the resolution process in the country.

Out of the total registered cases till 4QFY19, 42 per cent were from the manufacturing space and 19 per cent from real estate, renting and business activities, the report said. “Liquidation remained the most favourable closure of all admitted claims under the insolvency resolution process with 52 per cent of the closed cases facing liquidation. Out of the 378 liquidated cases, in 64, the resolution value was higher than the liquidation value,” it said.

“This remains a concern going ahead where companies are liquidated even in the presence of optimal resolution. Out of 1,143 ongoing processes, 362 cases have passed 270 days since admission, while another 186 cases have crossed 180 days since admission,” it added. The report concluded that under such circumstances, the number of cases facing liquidation will see a significant increase in the next few quarters. Besides, the report also noted that based on available data for all 94 cases resolved under the insolvency resolution process till 4QFY19, financial creditors have faced a haircut of 52 per cent on admitted claims. (IANS)

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