The Supreme Court on Monday ordered status quo in the Essar insolvency case while agreeing to expeditiously hear an appeal against the National Company Law Appellate Tribunal’s July 4 order, PTI reported. The top court said the monitoring committee supervising the insolvency process would continue its work till the hearing of the case on August 7.
The bench, headed by Justice RF Nariaman, was hearing a petition filed by the Committee of Creditors against the order approving Lakshmi Mittal-led ArcelorMital’s take over of Essar Steel. The tribunal, in its order, had rejected a petition questioning the bidder’s eligibility that was filed by the lead shareholder of the debt-ridden company.
The tribunal had also granted equal status to operational creditors as lenders in the distribution of the bid amount among Essar Steel’s creditors. It had also ruled that all financial creditors with a claim of more than Rs 1 crore would be entitled to 60.7% of their admitted claim, Bar and Bench reported. The National Company Law Appellate Tribunal had ordered the distribution of any profits of Essar Steel among the creditors on a pro rata basis.
The appellate tribunal had also included the added claims of Oil and Natural Gas Corporation Limited and National Thermal Power Corporation Limited, which raised the total claim amount to almost Rs 69,193 crore. Essar Steel was auctioned under the new Insolvency and Bankruptcy Code in order to recover Rs 54,547 crore of unpaid debts to financial lenders and operational creditors, according to PTI.