Supreme Court orders status quo in Essar Steel insolvency

The Supreme Court today ordered status quo in the Essar Steel insolvency case while agreeing to hear the appeal against the National Company Law Appellate Tribunal (NCLAT) order “expeditiously”..The Bench of Justices Rohinton Nariman and Surya Kant said that the legal issue in the case would be decided “once and for all”. It proceeded to list the case for detailed hearing after two weeks..In the interim, the Court said that the monitoring committee will continue to function. The status quo as of today will be maintained..The Committee of Creditors for Essar Steel had filed an appeal against the NCLAT order which approved ArcelorMittal’s resolution plan for Essar Steel..[Breaking] Essar Steel: NCLAT approves ArcelorMittal’s resolution plan, modifies the distribution of money.The Appellant Tribunal had, however, modified the distribution of Rs 42,000 crore promised in the resolution plan amongst Essar Steel’s financial and operational creditors..Holding that there could be no classes of financial creditors on the basis of being secured and unsecured, the NCLAT directed that all financial creditors having a claim amount of over Rs 1 crore would be entitled to 60.7% of their admitted claim..Similarly, it awarded around 60% of the admitted claim to certain operational creditors having claims of more than Rs 1 crore..The NCLAT also stated that the profits of Essar Steel, if any, during the pendency of the insolvency, would also be distributed among the creditors on a pro rata basis..The Appellate Tribunal also accepted additional claims by ONGC and NTPC, thus taking the total claim to almost Rs 69,193 crore..Also Read:CoC has no power to distribute money promised in Resolution Plan, NCLAT in Essar Steel Insolvency.How do the rules of insolvency operate? Were rules of insolvency disrupted by judicial intervention by NCLAT in Essar case?