Whitepaper: Marketplace for Bankruptcy Claims Trading
- Arpan Desai
- Jul 27
- 2 min read
Updated: Aug 12
Research Issue and Motivation
The Insolvency and Bankruptcy Code (IBC), 2016 has brought transformative change to India’s distressed asset resolution process.
However, one underserved stakeholder group in this ecosystem is operational creditors, especially smaller vendors and service providers. While the Code offers a structured claims process and equitable resolution framework via NCLT, creditors often face long timelines and limited liquidity during insolvency proceedings.
This has created demand for a mechanism through which such claims could be sold, assigned, or exited in exchange for immediate (though discounted) payouts.
Globally, marketplaces for bankruptcy claims trading have matured notably in the United States, where platforms such as Xclaim and ClaimsMarket facilitate secure and verified claim transfers among creditors and investors. These platforms bring transparency, speed, and price discovery to distressed claim trading.
In India, there exists no centralized or structured mechanism for the secondary market trading of bankruptcy claims, despite the growing volume of distressed cases under IBC. The lack of such a marketplace limits creditor flexibility, deters investor participation in unsecured debt, and reduces overall efficiency of the insolvency resolution process.
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This research is motivated by the need to conceptualize and evaluate the feasibility of a digital marketplace for bankruptcy claims in the Indian context focusing on both legal infrastructure and market readiness.
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Sources of Data
NCLT filings and IBBI case records for insolvency resolutions
MCA21 company filings for financial data pre- and post-resolution
Primary interviews with RPs and creditor representatives
RBI and IBBI policy papers and notifications
Secondary data from global claim marketplaces and investment firms
References
Insolvency and Bankruptcy Code, 2016 – https://ibbi.gov.in/legal-framework/laws/ibc
IBBI Publications – https://ibbi.gov.in/publications
RBI Trend and Progress of Banking Report – https://www.rbi.org.in/Scripts/AnnualPublications.aspx
SEBI Innovation Sandbox – https://www.sebi.gov.in
Xclaim Bankruptcy Marketplace – https://www.x-claim.com
NCLT Filings – https://nclt.gov.in
MCA21 Portal – https://www.mca.gov.in/
NIPFP & IIM-A working papers on insolvency outcomes
KPMG ARC India Report, 2023 (for market data on ARC recoveries)
IIM-Ahmedabad: Recovery Analysis under IBC Framework (2023)