CIRP proceedings - Financial Creditors - Related party - while ...

Section 21(2) of IBC: Related Party Financial Creditors Barred from CoC to Prevent Manipulation and Ensure Fairness.

February 3, 2021

Case Laws Insolvency and Bankruptcy SC

CIRP proceedings - Financial Creditors - Related party - while the default rule under the first proviso to Section 21(2) is that only those financial creditors that are related parties in praesenti would be debarred from the CoC, those related party financial creditors that cease to be related parties in order to circumvent the exclusion under the first proviso to Section 21(2), should also be considered as being covered by the exclusion thereunder. Mr Kaul has argued, correctly in our opinion, that if this interpretation is not given to the first proviso of Section 21(2), then a related party financial creditor can devise a mechanism to remove its label of a ‘related party’ before the Corporate Debtor undergoes CIRP, so as to be able to enter the CoC and influence its decision making at the cost of other financial creditors. - SC

View Source

← Previous Next →

CIRP proceedings - Financial Creditors - Related party - while ...

Section 21(2) of IBC: Related Party Financial Creditors Barred from CoC to Prevent Manipulation and Ensure Fairness.

February 3, 2021

Case Laws Insolvency and Bankruptcy SC

You may also like:

CIRP - discrimination of Related Party Financial or Operational Creditor - IBC treats related parties as a separate category for specified purposes, excluding from the...

The Appellant, a related party unsecured financial creditor, challenged the resolution plan approved by the Committee of Creditors (CoC) and the Adjudicating Authority,...

Section 53(1) of the Insolvency and Bankruptcy Code (IBC) provides for the order of priority in the distribution of liquidation assets. Financial debts owed to unsecured...

CIRP - Relating parties - As on the date of it becoming a part of the CoC, Respondent No. 2 was purely a Financial Creditor of the Corporate Debtor and hence, it cannot...

Resolution Professional's decision to remove appellant from Committee of Creditors upheld by NCLAT. The appellant, Hari Vitthal Mission, was determined to be a related...

Constitution of Committee of Creditors (COC) - 66% needed for CIRP - as per Section 21(2) of IBC, 2016, COC shall comprise of all financial creditors and must be...

The Appellate Tribunal affirmed the decision to exclude the Appellant and other unsecured Financial Creditors from the Committee of Creditors (CoC). The key issues were...

CIRP process - We are not convinced with the argument that amended Sub-Section (4) of Section 30 requires only Secured Financial Creditors to contribute towards interim...

Appellant are Financial Creditors or not - no direct disbursal of amount to the Corporate Debtor/Guarantor - Related Parties of the Corporate Debtor or not - The...

CIRP - Related party - Appellant being ‘related party’ cannot be part of the CoC - present is not a case where IRP has reviewed its decision - there is no error in the...

In the interest of justice the time spent till now before the Adjudicating Authority from the 2nd CoC Meeting till the date of this order should be excluded from...

Initiation of CIRP - Financial creditor within the meaning of sub-section (7) of Section 5 of the IBC - The Supreme Court affirmed the NCLAT’s judgment, holding that the...

Consideration of Scheme of Compromise or Arrangement - no opportunity was given to Respondent Nos.2 and 3 to explain and clarify their Scheme before Financial Creditors...

The Appellate Tribunal dismissed the appeal, holding that the Section 7 application filed by the Financial Creditor was not barred by Section 10A of the Insolvency and...

Admission of Section 7 application filed by the Financial Creditor - invocation of guarantee - application filed by the Financial Creditor is barred by Section 10A of...

Quick Updates: