- Essar’s Committee of Creditors challenged the NCLAT order in the Supreme Court
- NCLAT had approved the bid of ArcelorMittal for Rs 42,000 crore
- Order to increase the rights of operational creditors
new Delhi. The Supreme Court has ordered Essar Steel to maintain status quo in bankruptcy case. The next hearing will be on August 7. The Monitoring Committee will continue to do its job till Essar Steel’s Committee of Creditors challenged the July 4 order of the National Company Law Appellate Tribunal (NCLAT) in the Supreme Court.
The Tribunal also gave equal status to operational creditors
The tribunal had ordered the rights of operational creditors to be equal to secured creditors while snatching the rights of the Committee of Creditors. This will enable operative creditors to get more money under the bankruptcy process. Operational credits are called debtors of a company who supply operational resources. These include vendors too. The Supreme Court said on Monday that NCLAT can not work as a Resolutions Professional.
The Tribunal rejected the appeal of Essar Steel promoter Prashant Ruia, and approved the bid of Lakshmi Mittal’s company ArcelorMittal for Rs 42,000 crore. Ruia raised questions about ArcelorMittal’s qualifications
Essar Steel has a debt of Rs 54,547 crore. The company was auctioned under the Insolvency and Bankruptcy Code (IBC). In it the bid of Arcelmett was approved. In August 2017 bankruptcy proceedings against Essar Steel began.