Giving bankers major relief, the Supreme Court on Friday ruled that the Committee of Creditors has the right to decide the distribution of funds realised from the sale of an insolvent company’s assets, and that adjudicating authorities cannot make changes in an approved resolution plan.
The judgment has paved the way for ArcelorMittal’s takeover of Essar Steel in an insolvency process that has been going on for over two years and three months.
Justices Rohinton Nariman, Surya Kant and V Ramasubramanian, in their ruling, said operational creditors cannot be treated on par with financial creditors. In exceptional cases, the Apex court also allowed extension of the resolution deadline beyond the mandated 330 days prescribed by the IBC, at the discretion of the adjudicating authority.
The epic battle for the takeover of Essar Steel by ArcelorMittal had taken many twists and turns.
‘Settles many legal issues’
ArcelorMittal’s spokesperson said the company is pleased with the judgment and the resolution plan has been approved.
Wishing ArcelorMittal and its partner Nippon Steel success, an Essar spokesperson said they were acquiring a world-class facility in a market that has a long runway for growth.
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