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IBC Process- New Challenges as some Winners look to Wriggle out

IBC Process- New Challenges as some Winners look to Wriggle out

Resolutions under IBC may run into rough weather after the pandemic of COVID- 19 as bankers fear that winning bidders will review their interest in the companies which have been bankrupt and re-negotiate bids or pull out altogether.

Bankers now fear that other winning bidders will similarly invoke the force majeure or material adverse effect clauses to wriggle out of deals or lower down the price which they are paying to buy the companies. The companies are now citing the crisis of COVID-19 as the basis for negotiations or settlements.

The lenders fear that bidders of stressed assets will be losing interest, especially in the post-COVID- 19 era.  

Thus, It can be concluded that the companies which are undergoing insolvency or bankruptcy can now take the advantage of the crisis of COVID-19 as the basis for negotiations or settlements. However, the lenders fear that bidders of stressed assets will lose interest, especially after the pandemic of COVID-19 gets over.

 

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