Key Points
Kotak Mahindra Bank, which had 0.64% voting rights, objected to Ocean Capital Markets resolution plan since it would compel them to release third-party guarantees in favour of the resolution applicant without recovering their entire dues.AgenciesKotak.
On Tuesday, the bankruptcy court ordered the liquidation of a civil construction company on the grounds that the approved resolution plan deprives the dissenting creditor of exercising its right to recover the remaining loan amount from the guarantor...
Kotak Mahindra Bank objecting to the proposal stated that on receiving upfront payment, creditors must assign the entire security interest, including personal guarantee, corporate guarantee, and other security interests to the resolution applicant (RA)..
This is the prerogative of the financial creditors, in the guise of a resolution plan the said rights of the financial creditors cannot be stripped off against their will, the Cuttack bench of National Company Law Tribunal said in an order reviewed by ET...
The resolution plan also stated that the RA would have the discretion over capital reduction, which indicates that the promoter of the defaulting company will continue holding a stake in the insolvent company while lenders would take a steep haircut..
