Search Results for: What is financial debt

Mobilization Advance is Financial Debt or Operational Debt?

Mobilization Advance is an Operational Debt and not a Financial Debt referring to the abovementioned Supreme Court Judgement.

Debt without interest is also “Financial Debt” under IBC– Supreme Court

‘Financial Debt’ would have to be construed to include interest free loans advanced to finance the business operations of a corporate body.

Outstanding payments to allottees in Real Estate Projects are Financial Debts

The Supreme Court did not agree to the payment of amounts deposited by the promoter to homebuyers on the grounds that it would be preferential payment to one class of creditors.

Fake Commercial Transactions will not constitute ‘Financial Debt’ under IBC: SC

A perfect decision by the SC where the parties perform activities to avoid any commercial transactions which are collusive in nature or where financial creditor escape the bar under Section 21(2) first proviso of the IBC.

Does amount advanced as loan without proper proofs/documentations constitute a Financial Debt?

The matter is that in a situation where the Applicant is unable to prove the amount advanced as loan without proper documentations, such loan amount would not meet the requirements of a “Financial Debt”. 

Sound Financial Status of a Company for framing Debt Recovery Policies- Presales Research

Here we will briefly discuss about the sound financial status of a Company and how it can have a positive impact on framing Debt Recovery policies.

Are Corporate Guarantors equivalent to Corporate Debtors

The Supreme Court has made an attempt to shed light on this matter recently in K. Paramasivan v. The Karur Vysya Bank Ltd. An appeal is preferred before the apex court under which the NCLAT decision is challenged.

Operational Debt Includes Advance Payment Made to a Corporate Debtor for the supply of Goods or Services: SC

A debt arising from an advance payment given to a corporate debtor for the supply of goods or services would be deemed an operational debt.

Landowner in a development agreement cannot be considered a Financial Creditor

The Corporate Debtor would carry on construction and out of total saleable construction 32% will be of landowner and remaining 68% will be of the Corporate Debtor.

Rejection of claims to be notified to financial creditors in appeals as well: SC

Directing the Appellate Tribunal to reconsider the matter, the apex court said that the NCLAT must have notified the bank (Financial Creditor) before closing the CIRP initiated by the NCLT.

The Corporate Guarantor can initiate CIRP against the Corporate Debtor under “Right to subvention”

Proceeding against the Corporate Debtor for the recovery of the dues and hence can file a petition against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Adjudicating Authority.

Is Adjudicating Authority under obligation to accept an application against a Corporate Debtor u/s 7?

The Adjudicating Authorities have been given discretionary powers under section 7(5)(a) of I&B Code, 2016. The Authorities are required to apply their mind and take into consideration all facts and circumstances.

IBC Pecuniary Threshold: – Interest Component to Be Merged with Principal Debt?

The interest component can include in the principal debt to acquire a minimum threshold limit i.e., 1 crore if delayed payment stipulated in the agreement or invoice.