Section 53 of IBC : Section 53: Distribution Of Assets

Explanation using Example

Imagine a manufacturing company, "TechWidgets Ltd.," which has been struggling financially and eventually goes into liquidation. The company has various creditors, including employees, secured lenders, and the government. The liquidator sells the company's assets and must distribute the proceeds according to the priority set out in Section 53 of the Insolvency and Bankruptcy Code, 2016.

Here's how the law is applied:

1. The liquidator first pays off the costs associated with the insolvency resolution and liquidation process.
2. Next, they distribu...

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