The Supreme Court on Wednesday gave a week’s time to the operational creditors of bankrupt Essar Steel to challenge the new amendments to the Insolvency and Bankruptcy Code, which granted more powers to the lenders. A bench led by justice RF Nariman deferred the hearing on a batch of appeals till August 19 so as to decide the issue in light of fresh challenges following recent amendments.
“You can challenge a legislation as soon as it is passed,” the apex court bench said, while requesting attorney general KK Venugopal to be present in the court to assist it on the next date of hearing. It also allowed former promoters of Essar Steel (the Ruia family) to challenge the recent amendments in the insolvency code after they informed the court on Wednesday of their intention to do the same.
The apex court had on July 22 put on hold ArcelorMittal’s takeover of Essar Steel, after the lenders had sought a stay on the National Company Law Appellate Tribunal’s (NCLAT) ruling that reduced their share of sale proceeds from 90% to 60% and also put the financial creditors and operational creditors at par in settlement of claims. Read More
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