Currently, only financial creditors are part of the CoC that decides on a resolution plan and selects the winning bidder.Operational creditors (OCs), mostly MSMEs, may soon cease to get short shrift by the financial creditors, their mightier counterparts. The government is set to equip the OCs with more power under the Insolvency and Bankruptcy Code (IBC). Sources told FE that the plans include according voting rights to OCs like raw material suppliers in proportion to their claims from the defaulter (as admitted by the NCLT) and making them part of the committee of creditors (CoC). Also on the anvil are certain safeguards for them to receive proceeds as stressed firms go for liquidation.
Currently, only financial creditors are…
Read the full article at: https://www.financialexpress.com/industry/insolvency-law-operational-creditors-to-get-more-teeth-heres-how/1435474/