Search Results for: operational debt into financial debt

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.

Claims towards the lease of immovable property do not fall within the definition of Operational Debt under IBC

NCLAT, New Delhi Bench has held that claims towards rent of leasehold property do not fall within the definition of the operational debt under IBC.

Further litigation/alternative remedy cannot be pursued by creditors whose claim is taken into consideration within resolution plan

The Appellants cannot be permitted to pursue alternative remedy of suit/arbitration proceeding even if pending as Resolution Plan is binding on all the stakeholders.

Claim for damages cannot be an Operational Debt under IBC- Flipkart Analysis

The Hon’ble Karnataka High Court on Oct 25, 2019, stayed the insolvency proceedings on the grounds that the Tribunal lacked jurisdiction to adjudicate a claim for damages. 

Amount paid towards lease of immovable property not an Operational Debt- NCLAT

Claims towards rent of leasehold property do not fall within the definition of the operational debt in terms of Section 5(21) of the Insolvency and Bankruptcy Code, 2016.

Financial Creditors can Initiate Insolvency against Personal Guarantors under IBC

The new framework allows Creditors to continue recovery process with Personal Guarantor after completion of the Corporate Insolvency Resolution Process.

How Insolvency can be initiated by corporate debtor against itself?

How can a corporate person file for insolvency? the insolvency process for section 10 application, the fees, documents required and other details required to file such an insolvency petition.

Significance of Submitting demand notice by operational creditor before filing application under Section 9 of IBC

As per section 8 of IBC an operational creditor, if does not receive amount from corporate debtor, has to deliver a demand notice of unpaid amount along with the copy of invoice demanding payment of the amount involved.

Do NCLT is vested with the power to classify a transaction as a “preferential transaction”!

The Hon’ble NCLAT, Principal Bench, New Delhi held that the IBC does not vest the power to NCLT to Suo-moto classify a transaction as Preferential Transaction under Section 44 r/w Section 45 of IBC.

Discretion vs. Mandatory Admission: Future of Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016

When it comes to a detailed and again rather complicated legal framework of insolvency law under the Insolvency and Bankruptcy Code, 2016,(IBC) the key point is the commencement of the Corporate Insolvency Resolution Process (CIRP). This process is intended to assist firms that are in deficit and also to aid in avoiding being caught in the financial debt trap.

Real Solution for Real Estate Insolvencies

The major challenges in the insolvency resolution of real estate companies arise from the peculiarities of this sector, especially since the divergent interests of the allottees of the real estate projects do not align with the scheme of the CIRP.

Threshold limit of the Corporate Insolvency Resolution Process as per NCLT

There is no specific threshold limit for the NCLT Delhi under the IBC 2016. The IBC provides that a financial creditor, operational creditor, or the corporate debtor itself can initiate the insolvency resolution process with the NCLT.