645 Real Estate Firms Saved from Bankruptcy: IBBI Chief
645 real estate firms rescued under insolvency process, IBBI chief says, highlighting the success of the insolvency code in resolving real estate cases.
Real EstateInsolvencyBankruptcyIbbiIbcReal Estate NewsAug 13, 2024
According to IBBI Chairperson Ravi Mittal, the number of rescued companies is 2.5 times the number of companies that were liquidated. Mittal attributed this success to the measures introduced by the government to facilitate the resolution of real estate cases under the Insolvency and Bankruptcy Code (IBC).
The measures include designating home buyers as financial creditors, keeping possessed units out of liquidation estate, allowing project-wise insolvency, and permitting home buyers to act as resolution applicants. These measures have helped to resolve several large-scale real estate cases, including those of Jaypee Infratech, Kohinoor CTNL Infrastructure, and SARE Gurugram.
Mittal highlighted that the resolved cases have yielded a recovery of more than 60% of the admitted claims. Furthermore, the resolution plans have resulted in the realization of more than 32% of the admitted claims, and more than 161% of the liquidation value.
As of June, as many as 3293 corporate debtors have been rescued by the Code, and 2547 have been referred for liquidation. The resolved cases have resulted in the realization of more than 84.9% of the fair value of the corporate debtors.
The IBBI chief's statement underscores the effectiveness of the insolvency code in resolving real estate cases. It is a welcome development for the real estate sector, which has been facing significant challenges in recent years.
The success of the insolvency code in resolving real estate cases is a positive sign for the sector, which has been struggling with issues such as delayed projects, insolvency, and liquidity crisis. The code has provided a structured mechanism for resolving insolvency, which has helped to restore confidence in the sector.
However, despite this success, there are still challenges that need to be addressed. The real estate sector requires a sustained effort to improve transparency, accountability, and governance. The government and regulatory bodies must continue to work together to create a favorable business environment that encourages investment and growth in the sector.
In conclusion, the rescue of 645 real estate firms through the insolvency code is a significant achievement that highlights the effectiveness of the code in resolving real estate cases. It is a positive development for the sector, which has been facing significant challenges in recent years.
About Insolvency and Bankruptcy Board of India (IBBI)
The IBBI is a regulatory body established by the government to oversee the implementation of the Insolvency and Bankruptcy Code (IBC). The board is responsible for regulating the insolvency resolution process and ensuring that it is conducted in a fair and transparent manner.
Tags real estate, insolvency, bankruptcy, IBBI, IBC
Frequently Asked Questions
How many real estate firms have been rescued through the insolvency code?
645 real estate firms have been successfully rescued from bankruptcy through the corporate insolvency resolution process (CIRP).
What measures have been introduced to facilitate the resolution of real estate cases under the IBC?
The measures include designating home buyers as financial creditors, keeping possessed units out of liquidation estate, allowing project-wise insolvency, and permitting home buyers to act as resolution applicants.
What is the success rate of the insolvency code in resolving real estate cases?
The resolved cases have yielded a recovery of more than 60% of the admitted claims, and more than 161% of the liquidation value.
How many corporate debtors have been rescued by the Code?
As many as 3293 corporate debtors have been rescued by the Code, and 2547 have been referred for liquidation.
What is the role of the IBBI in the insolvency resolution process?
The IBBI is a regulatory body established by the government to oversee the implementation of the Insolvency and Bankruptcy Code (IBC). The board is responsible for regulating the insolvency resolution process and ensuring that it is conducted in a fair and transparent manner.
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