A guarantor’s rights of subrogation are provided for in Sections 140 and 141 of the Indian Contract Act, 1872 (“ICA”). These rights allow a guarantor to step into the shoes of the creditor, upon fulfilling the debtor’s payment obligations to the creditor. This means that the guarantor assumes all the rights including the security that the creditor enjoyed against the principal debtor.

In the July 2024 edition of the Restructuring Department Bulletin, we highlight recent decisions and developments impacting the restructuring arena and share the latest news on the Paul, Weiss Restructuring Department.

BACKGROUND

Since its inception the Insolvency and Bankruptcy Code, 2016 (Code) has been an evolving legislation with regular updation(s) being brought about in the form of rules and regulations with a view of streamlining the corporate insolvency resolution process (CIRP).

The Privy Council has recently upheld a BVI judgment refusing stay of a winding up petition in favour of arbitration. The recent Sian Participation Corp (In Liquidation) v Halimeda International Ltd¹ Privy Council decision provides much needed clarity on the exercise of the Court’s discretion to wind up a company where the debt is not disputed on genuine and substantial grounds and is subject to an arbitration clause.

On June 20, 2024, the United States Bankruptcy Court for the Southern District of Texas (the “Court”) issued a memorandum decision and order in the adversary proceeding involving Robertshaw US Holding Corp.

Alice Eaton and Sean Mitchell Discuss Paul, Weiss’s Restructuring

Practice in Vault Q&A

Alice and Sean describe the breadth of Paul, Weiss’s Restructuring

practice and what sets the practice apart in a Q&A in the 2024 edition

of “Practice Perspectives: Vault’s Guide to Legal Practice Areas.”

Elizabeth McColm and Sean Mitchell Publish “USA” Chapter in

ICLG – Restructuring & Insolvency 2024

In the latest ICLG – Restructuring & Insolvency Laws & Regulations,

Elizabeth and Sean discuss common issues in restructurings and

Although there are occasions when formal insolvency proceedings are unavoidable, there are many cases where a consensual, out-of-court approach is more appropriate and desirable.

We are often engaged to assist creditors, directors and other stakeholders with negotiating standstill agreements or restructuring support agreements to give breathing space to put new terms in place and allow the relevant corporate entity (or group) to continue as a going concern.

The Supreme Court (SC) in Global Credit Capital Limited & Anr v. Sach Marketing Private Limited & Anr, 2024 SCC OnLine SC 649 upheld the judgment and order of the National Company Law Appellate Tribunal, New Delhi Bench (NCLAT), dated 07 October 2021 (Impugned Order) by which Sach Marketing Private Limited (Sach) was held to be a ‘financial creditor’ of Mount Shivalik Industries Limited, the corporate debtor, (CD) in corporate insolvency resolution proceedings under the provisions of the Insolvency & Bankruptcy Code, 2016 (IBC).

Alice Eaton Featured at Wharton’s PE and Venture Capital Conference

Restructuring partner Alice Eaton spoke on the panel “Adjusting to a New Era: Redefining Value Creation in Uncertain Times,” as part of the Wharton School of the University of Pennsylvania’s 2024 Private Equity and Venture Capital Conference on March 29. The panel covered the use of innovative financing instruments and structures for investments in distressed assets.

Elizabeth McColm Discusses Women in Restructuring at Winter Bankruptcy Conference

On April 22, 2024, in the chapter 11 cases of GOL Linhas Aéreas Inteligentes S.A.