Status Of Financial Creditors With Unadmitted Claims

The Insolvency and Bankruptcy Code (Amendment) Code, 2018 ("the Amendment Code") which came into effect on 6th June, 2018 provides for various amendments to the Insolvency and Bankruptcy Code, 2016 ("the Code"). Amongst the significant amendments in the Code is one pertaining to the reduction in the threshold limit, of the voting shares of financial creditors at a meeting of Committee of Creditors ("CoC") for approval of a resolution plan, from 75% of the total voting share of financial creditors to 66% ("the Amendment").

The Amendment raised concerns on how the voting share of financial creditors was computed and whether financial creditors who were not admitted as members of CoC would be considered as abstaining/dissenting.