Enforcing Ex Ante Contractual Or Statutory Obligations: Manoeuvring The Turbulence In Airline Insolvency Law Through The Cape Town Convention
- IJLLR Journal
- Apr 4
- 1 min read
Harshit Madaan, National Law Institute University, Bhopal
Ali Asghar, National Law Institute University, Bhopal
I. Introduction
“Capitalist reality is first and last a process of change”
Joseph Schumpeter
The idea that an effective exit mechanism for companies is crucial to the capitalist realities of the market was realised by Joseph Schumpeter in the 20th century. These capitalist realities, through innovation, have played a crucial role in transforming society. These Corporate Bodies throughout the globe, have a capital financing structure, which substantially includes debt and equity. Due to certain circumstances, if these companies enter insolvency proceedings, globally, corporate creditors generally take control of the company’s assets through a Committee of Creditors.
In India, the Insolvency and Bankruptcy Code 2016, (IBC, 2016) seeks to balance the rights of corporate creditors and debtors by allowing the Committee of Creditors to take control of assets while ensuring the maximisation of the corporate debtor’s asset value. Furthermore, IBC, 2016 prioritises rehabilitating companies over liquidation. However, companies that operate on leasehold properties or floating third-party charges, lack owned assets making it challenging for them to achieve the intended goal of rehabilitation.
