Resolution Plans to Subsume Statutory Dues?
By Shikha Bansal & Richa Saraf (resolution@vinodkothari.com)
The Insolvency and Bankruptcy Code, 2016 facilitates drawing up resolution plans for corporate debtors who has defaulted in making payment to its creditors. The resolution plan is approved by a committee of creditors consisting of a class of creditors (called financial creditors) of the corporate debtor. The resolution plan, once approved and sanctioned by the adjudicating authority, becomes binding on all the stakeholders of the company including dissenting financial creditors and operational creditors. As such, it assumes the nature of a contract framed under a statute. However, the question before us is whether a class of creditors can approve a resolution plan which seeks to extinguish statutory liabilities of the corporate debtor. Read more →