Creditor distribution priority now requires operational creditors receive at least liquidation-equivalent recovery and fair treatment.

Amendment mandates that resolution plans secure for operational creditors a payment not less than the higher of the liquidation-distribution amount or the distribution under the statutory priority order, and that dissenting financial creditors receive no less than the liquidation-distribution amount; such distributions must be fair and equitable. The amendment applies to ongoing insolvency processes where plans are not finally determined or where appeals or legal challenges are pending, and requires consideration of the proposed manner of distribution including creditor priority and security interest value.

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