We’re pleased to share this week’s curated insights from the world of insolvency and bankruptcy—both domestic and global. From pivotal judicial pronouncements to CIRP updates, here’s your snapshot of key developments.
🇮🇳 India Highlights
⚖️ Key Judicial Developments
✅ Section 60(5) Limitation Clarified NCLAT Delhi | M.R.A. Associates v. Nextgen Procon Pvt. Ltd. Applications invoking the Adjudicating Authority’s residuary powers under Section 60(5) are subject to a 3-year limitation. This ensures procedural discipline and curbs misuse.
✅ Third-Party Payments Not Preferential NCLAT Delhi | Commercial Tax Dept. v. Corporate Debtor Payments made by unrelated third parties from their own accounts during CIRP do not qualify as preferential transactions under Section 43.
✅ Fraudulent Transactions & Restoration of Assets NCLT | Venkatesan Sankaranarayanan v. Nitin S. Kasliwal & Ors. Assets siphoned off even years before CIRP may be restored to the CD’s estate under Section 66 if fraud is established.
✅ OTS Doesn’t Discharge CD from CIRP NCLAT | M/s AJS Builders Pvt. Ltd. A One-Time Settlement by a personal guarantor does not absolve the Corporate Debtor of its liability under IBC.
✅ Bankruptcy Trustees Must Adhere to Notice Requirements SC | Ajay Kumar Radheshyam Goenka v. Tourism Finance Trustees ignoring statutory notices (Section 138(1)(a)) can face legal consequences, especially if debtors’ interests are harmed.
✅ Timing of Related Party Status NCLT Ahmedabad ‘Related party’ status is to be determined at the start of insolvency, not based on historical roles—reinforcing the Phoenix ARC v. Spade Financial precedent.
🏢 New CIRP Filings (Source: IBBI)
- Matoshri Laxmi Sugar Co. Ltd.
- Electronic Controls & Discharge Systems Pvt. Ltd.
💡 Regulatory Milestone
📊 ₹26 Lakh Crore in Debt Addressed Since IBC Inception As of July 2025, the IBC regime has helped resolve or restructure over ₹26 lakh crore in stressed assets—through both formal CIRP and out-of-court settlements. Source: CRISIL Ratings
🎓 Capacity Building Update
🧑🎓 7th PG Diploma in Insolvency Launched by IICA The Indian Institute of Corporate Affairs inaugurated its 7th batch of the Insolvency PG Diploma in Manesar, continuing its effort to build a pool of skilled insolvency professionals.
🌍 Global Developments
🇺🇸 U.S. Insolvency Snapshot
📈 Personal Bankruptcies Rise
- Chapter 7 filings surged 15% (YoY) to 163,219 cases.
- Corporate Chapter 11 filings dipped 15%, signaling stabilization in business stress.
🎓 Student Loan Bankruptcy Reform Proposed
- Bill H.R. 4444 seeks to remove the “undue hardship” clause, making student loan discharge more accessible.
🏭 Wolfspeed Files for Chapter 11
- The U.S. chipmaker aims to restructure $6.5 billion debt with $275M DIP funding.
🛑 Chapter 7 Discharge Denied Over Asset Non-Disclosure
- A Texas couple’s bankruptcy relief was denied after failing to declare $14.6M in offshore assets.
🏛️ U.S. House Judiciary Hearing Held
- The hearing focused on legislative reforms aimed at balancing debtor-creditor interests, particularly for small businesses.
📢 At AIPE, we remain committed to advancing insolvency practice through informed discussion and professional collaboration.