CORPORATE INSOLVENCY AND DISTRESSED ASSETS: A LEGAL PERSPECTIVE

AUTHOR – MEDHA UPADHYAY, STUDENT AT CHRIST (DEEMED TO BE UNIVERSITY)

BEST CITATION – MEDHA UPADHYAY, CORPORATE INSOLVENCY AND DISTRESSED ASSETS: A LEGAL PERSPECTIVE, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (1) OF 2025, PG. 1128-1137, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

The Insolvency and Bankruptcy Code (IBC) has emerged as a paradigm shift in India’s approach to distressed asset management, significantly redefining the insolvency landscape.
Before the passing of the law, the process of corporations’ distress was accompanied by judicial fragmentation, long periods of time, and low rates of recovery which affected the confidence of the creditors and the economy. The IBC provided a unified and structured approach to address the NPAs in a time-sensitive manner, thereby strengthening the creditor rights. This article delves into the impact that the IBC has had on distressed assets, examining how it has improved recovery rates, supported creditors, and attracted foreign investment in India’s distressed asset market. It also explores the critical role of the National Company Law Tribunal (NCLT) in shaping the insolvency resolution landscape. However, despite its successes, the Code faces several challenges, including procedural delays, judicial uncertainty, and asset valuation. This article suggests strategic improvements and reforms with a view to enhance India’s insolvency framework to ensure that the insolvency code is implemented in a manner to address the core problems faced by firms.

KEYWORDS: Distressed Assets, Financial Distress, IBC, Asset recovery, NCLT, ARCs.