Initiation of CIRP - Section 7 (5) of the Code uses the term ...

Adjudicating Authority Opts Against CIRP for Export Company Citing Socio-Economic Impact and Anticipated Recovery u/s 7(5.

July 10, 2020

Case Laws     Insolvency and Bankruptcy     Tri

Initiation of CIRP - Section 7 (5) of the Code uses the term "may", which gives this Adjudicating Authority the option to weigh the pros and cons of initiating a CIRP against the Corporate Debtor. In the circumstances stated above, it is not considered justifiable to send the Respondent into CIRP, as that would have serious socio-economic repercussions on an Export oriented Company with huge foreign funding, and of the stature mentioned above, especially on the hundreds of employees and other stakeholders and customers, and that too when the Respondent Company is undergoing a temporary funding lull and expects to recover soon.

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