Research and Articles

NDA-Hotline

- Debt Funding in India Series
- Private Equity Corner
- The Startups Series
- Court Corner
- Investment Funds: Monthly Digest
- Insolvency and Bankruptcy Hotline
- Deal Destination
- New Publication
- M&A Interactive
- Lit Corner
- Private Debt Hotline
- Food & Beverages Hotline
- Companies Act Series
- Gaming Law Wrap
- Private Client Wrap
- GIFT City Express
- Regulatory Hotline
- Capital Markets Hotline
- Tax Hotline
- Corpsec Hotline
- Dispute Resolution Hotline
- M&A Hotline
- Pharma & Healthcare Update
- Competition Law Hotline
- HR Law Hotline
- IP Hotline
- Telecom Hotline
- FEMA Hotline
- Social Sector Hotline
- iCe Hotline
- SEZ Hotline
- Media Hotline
- Funds Hotline
- Education Sector Hotline
- International Trade Hotlines
- Other Hotline
- Real Estate Update
- Realty Check
- White Collar and Investigations Practice
- Legal Update
- IP Lab
- Cross Examination
- Technology & Tax Series
- Technology Law Analysis
- Yes, Governance Matters.
- Financial Service Update
- Japan Desk ジャパンデスク
Insolvency and Bankruptcy Hotline
May 27, 2021No equality amongst equals: Treatment of secured creditors under IBC
This article was originally published in the 24th May 2021 edition of
SUMMARY
The question of whether senior secured creditors have primacy over junior secured lenders in the liquidation process under IBC has been a subject of much debate. The Insolvency Law Committee (ILC) was of the view that valid inter-creditor agreements are to be respected in the liquidation process, and therefore, recommended that a clarification be added to the Code to this effect. However, the government, in its legislative wisdom, did not accept such a recommendation and the question finally came to be settled by National Company Law Appellate Tribunal (NCLAT) in the case of Technology Development Board v Mr. Anil Goel. In the present case the NCLAT disagreed with the ILC and held that no preferential treatment to senior secured creditors can be allowed in the distribution of liquidation proceeds if such creditors have relinquished their security towards the liquidation estate.
For the complete article please click here.