New Delhi, Aug. 15 -- Mumbai,

New Delhi :

The Insolvency and Bankruptcy Code (Amendment) Bill, 2025, tabled in the Lok Sabha on 12 August, closes a key exit route, making it harder for companies to quit insolvency proceedings for an early out-of-court settlement.

The amendment makes the Committee of Creditors' (CoC) approval mandatory for an applicant to withdraw from bankruptcy proceedings under Section 12A of the IBC.

A CoC-a group of financial creditors-is set up by the interim resolution professional (IRP) after the corporate insolvency resolution process (CIRP) is initiated. As of now, companies can withdraw the CIRP application even before the CoC is formed by securing approval from 90% of the creditors.

However, the proposed C...