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Debt Recovery Forums and M&A - Apohan Corporate Consultants Pvt. Ltd.

Debt Recovery Forums and M&A

Classification based on regulatory forum of acquisition of distressed assets:

Following are the forums where a strategic investor main acquire a company:

Asset reconstruction companies (ARCs):

The ARCs acquire distressed assets from banks when the long term loans of the bank turn into non performing assets and the banks sees that the recovery of its capital is difficult.

Bank auction:

A Bank may choose to auction the assets provided as security for the loan. Typically, apart from the other personal assets of the businessman, the manufacturing assets and the corporate assets also become available to the bidders.

Lok Adalat:

Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably.The cases under Lok Adalats relevant for the businesses are partition Claims, Damages Cases, Mutation of lands case, Land Pattas cases, Land acquisition disputes, Bank’s unpaid loan cases, etc.

Debt recovery Tribunal (DRT):

The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) provides speedy redressal to lenders and borrowers through filing of Original Applications (OAs) in Debts Recovery Tribunals.

SARFAESI Act:

It provides access to banks and financial institutions covered under the Act for recovery of secured debts from the borrowers without the intervention of the Courts.

CIRP under IBC process /NCLT

The National Company Law Tribunal is a body that adjudicates issues relating to companies. All proceedings under the Companies Act, including proceedings relating to arbitration, compromise, arrangements, reconstructions and the winding up of companies are disposed off by the National Company Law Tribunal. It is the adjudicating authority for the insolvency resolution process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code, 2016.

High Court/ Supreme Court:

As a result of court litigations, an investor main get position of the disputed equity in a company.


 

Apohan understands the jurisdiction of various corporate forums. Apohan assists its client in management of the proceedings going on there in terms of strategic advisory. Apohan manages the transaction right from the problem identification phase, to the closure of deal with perfection.


 

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