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Why NCLT approved Subhash Chandra’s Rs 6.5-crore proposal despite financial creditor rejection

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Why NCLT approved Subhash Chandra’s Rs 6.5-crore proposal despite financial creditor rejection

Why NCLT approved Subhash Chandra’s Rs 6.5-crore proposal despite financial creditor rejection

Why did the NCLT approve the extremely low Rs 6.5-crore plan proposed by Dr Subhash Chandra, which amounts to just 0.03% of the total claims of Rs 22,006 crore? The major reason behind the approval was the voting pattern among creditors. Chandra had also not provided personal guarantees for the entire Rs 22,006 crore, but for a significantly smaller amount. Here are the details based on the 144-page NCLT order.

The National Company Law Tribunal's approval of Subhash Chandra's Rs 6.5-crore repayment plan, against Rs 22,006 crore of admitted claims, was driven by the voting outcome among creditors and the tribunal's reliance on their commercial wisdom. While several financial creditors opposed the plan over the low recovery, creditors representing about 80% of the voting share backed it. The 144-page NCLT order sets out how the nature of Chandra's personal guarantees, the claims admitted in the proceedings and the creditors' voting ultimately shaped the decision. There were 23 creditors in the process, of which seven financial lenders voted against the resolution plan submitted by Chandra. Six creditors did not vote, while 10 creditors, comprising LPs, trustees, advisers and distributors, voted in favour of the plan. The plan secured the requisite majority, leading to its approval by the NCLT. Advt

Who approved Chandra’s resolution plan, who favoured it and who voted against it? Sr. No. Name of Creditor Voting Item B3 (approval of Repayment Plan)

Background: What is the case?



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