The insolvency and bankruptcy regime, with crucial rulings, timely legislative and regulatory action, has seen a number of amicable commercial settlement of long outstanding debts. The regime is further expected to smoothen recovery of debts from ailing borrowers.
Though settling of disputes regarding debts with a haircut is a win-win situation for the lender as well as the borrower, tax implications of such transactions on the stakeholders is manifold. Tax consequences can rise on the borrower, the lender, the successful purchaser, the guarantor, the mortgagor, in some cases, the share holders of the borrowers as well. The resolutions can, in many cases, prove beneficial to the directors and the shareholders of the borrowers.
Lakshmikumaran & Sridharan (L&S), in its endeavor to keep all its clients updated, is organizing a conference call to discuss the above issues.
Mr. S Sriram
Joint Partner, L&S