Interim financing: should lenders throw away good money after bad money to support insolvency?

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Synopsis

IBBI Chairman Ravi Mittal has offered lenders to provide bridge financing to companies going through insolvency as this will help improve valuation and therefore allow them a better recovery. However, experts say a quick resolution – meeting the 330-day deadline to close a case – may be the only way to attract lenders who burned their fingers earlier.

In the winter of 2017, senior Yes Bank officials were spotted in a cafe at Jaypee Vasant Continental, a five-star hotel in New Delhi, about to make a pitch to resolution professional Anuj Jain ( RP) from Jaypee Infratech. The company promoted by Manoj Gaur was one of the first major cases to file for bankruptcy shortly after the government passed the Insolvency and Bankruptcy Code (IBC). A few tables away

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