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NCLAT gives conditional nod to ArcelorMittal’s resolution plan for Essar Steel

Steel News - Published on Tue, 19 Mar 2019

Image Source: Zitamar
Financial Express reported that National Company Law Appellate Tribunal has accorded a conditional nod to ArcelorMittal’s INR 42,000-crore resolution plan for Essar Steel. A two-member bench, headed by justice SJ Mukhopadhaya, said the acceptance of the resolution plan submitted by ArcelorMittal will be subject to its final order in the appeal filed by the Essar Steel promoters and Standard Chartered against the move. It also said there is no stay on disbursal of the funds among financial and operational creditors of Essar Steel. Bench said “We are not going to interfere with the approved resolution plan. There will be no setting aside of the approved order on the ground of discrimination in the distribution of funds. If there is indeed any discrimination, we will redistribute it.”

The NCLAT will hear the matter again on March 27.

To deal with the issue of discrimination, the NCLAT said it would deal with some questions pertaining to law like, whether a guarantor could be grouped in the same bracket as that of a financial creditor and whether a distinction could be made in the categorization on the basis of related or non-related party among operational creditors.

The NCLAT also asked the Insolvency and Bankruptcy Board of India (IBBI) to file a reply on the average pay out on the distribution of funds between financial and operational creditors in the approved resolution cases so far.

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Posted By : Rabi Wangkhem on Tue, 19 Mar 2019
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