Read the latest update authored by our Partner, Bhalchandra Palav and Associate, Grishma Dalvi on the Supreme Court upholding a Government notification for invoking personal guarantees of promoters whose companies have defaulted on bank loans.
"The Supreme Court judgment paves way for Banks/lenders to initiate and pursue simultaneous action against the corporate debtor and the personal guarantors, which would ultimately result in maximum realization of value of stressed assets. It is no secret that the Personal Guarantors/Surety in most cases are the directors or the promoters of corporate debtor and are more often than not, individuals primarily responsible for the insolvency of the company. In view of the above Supreme Court ruling, one may say that the famous quote “Bankruptcy is a legal procedure when you put money into trouser pockets and give the jacket to creditors” will soon cease to exist under the IBC Regime."
Read the full update here.