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Insolvency of personal guarantor is independent of the corporate insolvency resolution process of the corporate debtor

Facts

India, Insolvency & Restructuring, Khaitan & Co
Part Settlement of Employees’ Claims Not Enough to Prevent Insolvency

Facts

India, Insolvency & Restructuring, Litigation, Khaitan & Co
Ergo analysing developments impacting business: Interest free term loan is a “Financial Debt” as per the Insolvency and Bankruptcy Code, 2016

The Supreme Court of India (SC) in Orator Marketing Private Limited v Samtex Desinz Private Limited, Civil Appeal No. 2231 of 2021, judgment dated 26th July 2021 has held that an interest free term loan constitutes a financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC).

The IBC provides that a financial debt is “a debt along with interest, if any, which is disbursed against the consideration for the time value of money” furthered by an inclusive list of examples that may be considered as a financial debt.

India, Banking, Insolvency & Restructuring, Litigation, Khaitan & Co, Supreme Court of India
Hamersley v Forge: the limitations of set-off rights in a liquidation scenario

In the event of a contractual counterparty going into liquidation, whether or not a trade counterparty may claim set-off against debts owed to the insolvent counterparty can dramatically affect the commercial position of the account debtor. This was recently highlighted in the decision of Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers appointed) [2017] WASC (2 June 2017).

What does this mean for you?

Australia, Insolvency & Restructuring, Litigation, King & Wood Mallesons, Liquidation