Resolution Plan Must Pay Dissenting Financial Creditors Their Liquidation Value Upfront Before Payments to Assenting Creditors

The NCLAT upheld the Adjudicating Authority's interpretation of Clause 21 of the resolution plan, confirming that dissenting financial creditors must receive their liquidation value upfront before any payments to assenting financial creditors. The Tribunal distinguished this case from Puro Natural Sugars JV, noting that here the plan explicitly provided for priority payment to dissenting creditors. The dissenting creditors had rejected the plan because they preferred receiving a smaller amount (15% liquidation value) immediately rather than 100% over ten years. The NCLAT found no error in the Adjudicating Authority's directive requiring payment to dissenting financial creditors before any recoveries by assenting creditors. Appeal dismissed. .....

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