This is crucial since a large sum of lenders capital is tied in such assets, Bansal added.
Lack Of Clarity In Relinquishing Or Realising Security Interest
The second challenge relates to secured lenders in whose favour assets of the company have been charged as a security for the loan extended. The insolvency code gives secured lenders two options regarding their secured interest:
- Relinquish the interest so that the asset forms part of the liquidation estate which the liquidator can then sell, or
- Retain the security interest and realise it by selling the asset itself.
A lack of procedural clarity is making both these options challenging.
Bansal pointed to a recent case where the liquidator took a view that once a creditor has filed claim befor…
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