The NCLT has rejected a resolution plan that proposed ₹7 Crores against a liquidation value of ₹9.42 Crores, finding it inadequate in protecting the statutory rights of dissenting creditors.
NCLT Rejects Resolution Plan for Dissenting Creditors Violation
The NCLT has ruled against a proposed resolution plan that offered ₹7 Crores in settlement while the liquidation value was assessed at ₹9.42 Crores, citing insufficient provisions to protect the entitlements of dissenting creditors as outlined under section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC).
The tribunal pointed out that the offered resolution did not sufficiently safeguard the statutory rights of dissenting creditors, which is paramount in ensuring equitable distribution of assets amidst insolvency proceedings. The NCLT noted that any resolution plan must adequately address the rights of all stakeholders to be deemed compliant.
This decision emphasizes the importance of recognizing and protecting dissenting creditors' statutory entitlements during the resolution process, reinforcing the need for comprehensive due diligence and legal compliance when drafting resolution plans.
Citations
- NCLT Order (2026) NCLT Order No. 1450473
