REFORMING CORPORATE RESOLUTION: THE 2025 AMENDMENT BILL AND CODIFICATION OF GROUP INSOLVENCY
DOI:
https://doi.org/10.53555/eqrn1v07Keywords:
Insolvency and Bankruptcy Code, Amendment Bill, Group Insolvency, Corporate Group, Procedural Coordination, Substantive ConsolidationAbstract
The Insolvency and Bankruptcy Code, 2016 (IBC), introduced as a framework for resolving insolvency in India, has significantly transformed the corporate restructuring landscape over the past decade. However, the complex economic realities of modern corporate structures which include vast conglomerates, special purpose vehicles, and integrated enterprise groups, have exposed critical legislative gaps in the Code’s original single-entity approach. To rectify these gaps, the Insolvency and Bankruptcy Code (Amendment) Bill, 2025, was introduced.
This article critically examines the approach of group insolvency in India. It highlights the necessity of transitioning from ad hoc judicial interventions to a codified, statutory mechanism, as envisioned by the proposed Chapter VA and Section 59A of the Code. Furthermore, it examines important court decisions in cases like Videocon, Adel Landmarks, Lavasa, and IREO that filled the legal gap before the 2025 Amendment Bill. The article further analysed the other relevant legislations, such as the UNCITRAL Model Law on Enterprise Group Insolvency (MLEGI) 2019, the European Union's EIR Recast 2015, the United States Chapter 11 framework, the German Insolvency Code (InsO), and the Italian Code of Corporate Distress. Finally, this article outlines the optimal regulatory framework to maximise asset value and ensure fair recovery for creditors in complex group insolvencies in a time-bound manner.
References
1.Cases
Salomon v. Salomon & Co. [1897] A.C. 22 (H.L.).
State Bank of India v. Videocon Industries Ltd., M.A. 1306/2018 in C.P. No. 02/2018 (NCLT Aug. 8, 2019).
Edelweiss Asset Reconstruction Co. Ltd. v. Sachet Infrastructure Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 377 of 2019 (NCLAT Sept. 20, 2019).
Oase Asia Pacific Pte Ltd. v. Axis Bank Ltd., Company Appeal (AT) (Insolvency) No. 783 of 2020 (NCLAT Feb. 26, 2021).
In re United Stairs Corp., 176 B.R. 359 (Bankr. D.N.J. 1995).
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In re Owens Corning, 419 F.3d 195 (3d Cir. 2005).
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Regulation (EU) 2015/848 of the European Parliament and of the Council of May 20, 2015 on Insolvency Proceedings (Recast), 2015 O.J. (L 141) 19.
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4.Journal Articles
Ilya Kokorin, The Rise of ‘Group Solution’ in Insolvency Law and Bank Resolution, 22 Eur. Bus. Org. L. Rev. 781 (2021).
Gaurav Chaliya, Three-C’s in the Group Insolvency: An Indian Outlook, 17 Pratt’s J. Bankr. L. 208 (2021).
Vibha Pandey & Samir Gopalan, One Group, One Grave? The Case for Substantive Consolidation in Governance-Weak Conglomerates, 11 Int’l J. Env’tl Sci. 1414 (2025).
Roberto Bonsignore et al., Updates to Italy’s Insolvency Code, 21 Pratt’s J. Bankr. L. 40 (2025).
5.Other Sources
1.Daniel J. Merrett, Notice of Proposed Substantive Consolidation, Jones Day (Dec. 2019).
2.Kevin C. Maclay et al., Cramdown & Substantive Consolidation, Caplin & Drysdale (Apr. 19, 2018).
3.S.D. Ind. Bankr. Ct., Rule B-1015-1 (Consolidation or Joint Administration).
4.Michael Immordino et al., The Insolvency Code: Perfect Timing for a New Legal Framework for Distressed Companies, White & Case LLP (Nov. 4, 2022).
5.Pierantonio Musso et al., The New Italian Insolvency Code: A Predicted Revolution, Hogan Lovells (July 27, 2022).
6.Andrea Novarese et al., Debtor-in-Possession Financing Under Italian Insolvency Code, Latham & Watkins (Apr. 16, 2019).
