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of <h1>Understanding Section 53: Prioritization of Asset Distribution in Liquidation Under Insolvency and Bankruptcy Code, 2016</h1> Section 53 of the Insolvency and Bankruptcy Code, 2016, outlines the order of priority for distributing proceeds from the sale of liquidation assets. The hierarchy starts with covering insolvency resolution and liquidation costs, followed by workmen's dues and secured creditors who relinquish security. Next are wages for non-workmen employees, unsecured creditors, government dues, and remaining secured creditors. Subsequent payments go to other debts, preference shareholders, and finally, equity shareholders or partners. Contractual arrangements disrupting this order are disregarded, and liquidator fees are proportionately deducted from each class of recipients. Workmen's dues are defined per the Companies Act, 2013.
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