Will Recovery Rate Improve From Personal Guarantors’ Insolvency Resolution?

A rating company CareEdge Ratings claimed in its report that the recovery rate may improve from personal guarantors. CareEdge Ratings cited this on the backs of the Supreme Court that upheld the constitutionality of IBC provisions on Personal Guarantors’ Insolvency Resolution and dismissed more than 200 petitions that were challenging the resolution’s legal validity. The recovery rate from the personal guarantors under the IBC (Insolvency Bankruptcy Code) is said to improve in the future with the apex court’s ruling to affirm the constitutionality of the IBC provisions regarding Personal Guarantors’ Insolvency Resolution. Do you know what is the current recovery rate from personal guarantors under IBC? If not, the following sections are waiting for you. Stick with this page and take a look at the following sections for more details. Scroll down.

Recovery

Speaking of the current recovery rate from personal guarantors, currently it stands at 5.22 percent which is anticipated to improve after SC’s ruling to validate the constitutionality of the Insolvency Bankruptcy Code provisions regarding Personal Guarantors’ Insolvency Resolution. Meanwhile, the apex court upheld the IBC constitutionality provisions on Personal Guarantors’ Insolvency Resolution and dismissed more than 200 challenging petitions to its legal validity. The ruling of the Supreme Court implies that the personal assets of the personal guarantor can be used to settle the debts owed to lenders. Continue reading this article and learn more.

Between the financial year 2019-2020  and the second quarter of FY24 only 21 out of the total cases admitted, have yielded approval of repayment plans and have realized Rs 91.27 crore, which is only 5.22 percent of their approved claims. On the other hand, 62 cases have been either rejected, withdrawn, or dismissed. The rating agency observed a surge in delays for CIRP (Corporate Insolvency Resolution Process). Drag down the page and read more details.

Also Read:  JSW Infrastructure IPO: Here’s What GMP Signals

As per CareEdge Rating’s data, for the realization of the process in 67 percent of the ongoing CIRPs in Sept 2023 as compared to 63 percent in Sept 2022, there has been a delay of over 270 days. In Sept 2021, the figure was 73 percent. The second largest segment is the ‘more than 180 but less than 270 days’ section which has increased from 11 percent in Sept last year to 13 percent of the cases in September this year. Whereas, the segment between 90 and 180 days has seen a decrease of 5 percent from 15 percent in September 2022 to 10 percent of the cases being pending in September 2023. Stay tuned.

Amzad Khan
Amzad Khan

Hey there, guys. I am Amzad Khan. I enjoy writing on topics related to my interests in gaming and technology. My work has attracted a dedicated fan base thanks to the fresh and unexpected angle I bring to each piece.