SECTION T - SALE & TRANSFER OF ASSETS

If it was necessary to sell or transfer assets (including a business) of an insolvent corporate borrower what, if any, are the major difficulties or problems associated with that process (for example restrictions on transfer or sale of land; providing for the transfer or welfare of employees on a sale or transfer of a going concern business)?

Shareholders approval in general meeting will be required. Any permission, as may be required, of the mortgagees, lessors and other competent authorities will be required to be obtained. A major problem will be the termination of employees. Labour Court's permission will be required for terminating employees and for closing down the business or industrial establishments of the borrower. This may take upto one year. Payment of termination benefits to the employees will be a heavy item of expense. The workers may also create a law and order situation.