Super priority lending (also known as rescue financing) has been recognized in many jurisdictions. In India, it has now been expressly covered, to some extent, under the Insolvency and Bankruptcy Code, 2016 (IBC). It falls under the realm of interim finance, which is provided during the corporate insolvency resolution process of an Indian corporate debtor under the IBC. Lenders generally provide super priority lending or rescue financing to provide bridge funding or interim financing for reviving a viable borrower from the distressed situation while having a priority in repayment of such financing over existing lenders.
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The IBC was enacted to amend and consolidate the existing laws relating to…
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