Apex court stays NCLAT verdict in Essar Steel insolvency case
The Supreme Court on Monday put on hold the sale of Essar Steel India Ltd to ArcelorMittal after lenders to the bankrupt Indian steel maker challenged an appeals court ruling that said operational creditors have to be treated on a par with financial creditors. The Supreme Court agreed to “expeditiously" hear the plea filed by banks against the National Company Law Appellate Tribunal (NCLAT) order of 4 July. The bankruptcy appeals court order, approving ArcelorMittal’s ?42,000 crore offer for Essar Steel, had upset secured financial creditors, as it diminished their priority rights to the proceeds generated from the sale or liquidation of a bankrupt entity. A division bench of Justices Rohinton Fali Nariman and Surya Kant said the NCLAT order not be given effect to as of now.
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