Context: In an economy with depressed expectations, bankrupt companies would be assumed to be unredeemable, even when viable, and consigned to liquidation. Hence, there is a call for softer bankruptcy laws during macroeconomic downturns.
COVID-19 and Bankruptcy law
Conclusion: We must catch the problem early by ensuring that SMAs do not become NPAs, and NPAs do not trigger bankruptcy. The focus must shift to upstream markets for distressed debt.