India: Insolvency/Bankruptcy/Re-Structuring

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Article
NCLAT Clarifies that Accounting Set-Offs May Constitute Preferential Transactions under s. 43 of the IBC
The NCLAT examines whether accounting adjustments that extinguish a corporate debtor's receivables in favour of related parties constitute preferential transactions under the Insolvency and Bankruptcy Code. This ruling clarifies that actual fund transfer is not necessary for invoking avoidance provisions where such transactions result in the extinguishment of receivables, reinforcing the 'substance over form' doctrine in insolvency proceedings.
India Insolvency
MA
Metalegal Advocates
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Article
NCLAT Clarifies that Accounting Set-Offs May Constitute Preferential Transactions under s. 43 of the IBC
The NCLAT examines whether accounting adjustments that extinguish a corporate debtor's receivables in favour of related parties constitute preferential transactions under the Insolvency and Bankruptcy Code. This ruling clarifies that actual fund transfer is not necessary for invoking avoidance provisions where such transactions result in the extinguishment of receivables, reinforcing the 'substance over form' doctrine in insolvency proceedings.
India Insolvency
MA
Metalegal Advocates
See more