The Code contains no provision for group insolvency. Tribunals have nonetheless developed a workable practice, ordering procedural consolidation where the corporate debtors are functionally inseparable.
Procedural, not substantive
Almost every reported order stops at procedural consolidation — a common resolution professional, coordinated hearings, a joint information memorandum. Substantive consolidation, pooling assets and liabilities, remains exceptional.
A practice built on discretion is only as durable as the bench that exercises it.
The case for codification
The absence of a statutory basis leaves each order open to challenge on jurisdiction. A short amendment recognising procedural consolidation would settle a question that has now been answered the same way dozens of times.
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