https://www.taxtmi.com/caselaws?id=762831 Compulsorily convertible debentures and the Debenture Subscription Agreement were held to create a financial debt under the Insolvency and Bankruptcy Code because the transaction involved raising funds through debentures, an equity conversion option, and enforceable monetary consequences on default, including interest on defaulted amounts. On a true construction of the agreement, these features showed disbursal of money against consideration for the time value of money, bringing the claim within the statutory definition of financial debt. The existence of an arbitral award and pending proceedings under section 34 of the Arbitration and Conciliation Act, 1996 did not change the insolvency character of the claim. The respondent was therefore treated as a financial creditor entitled to participate in the Committee of Creditors. en-us Fri, 06 Dec 2024 00:00:00 +0530 Mon, 09 Dec 2024 08:44:19 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=762831 Compulsorily convertible debentures and the Debenture Subscription Agreement were held to create a financial debt under the Insolvency and Bankruptcy Code because the transaction involved raising funds through debentures, an equity conversion option, and enforceable monetary consequences on default, including interest on defaulted amounts. On a true construction of the agreement, these features showed disbursal of money against consideration for the time value of money, bringing the claim within the statutory definition of financial debt. The existence of an arbitral award and pending proceedings under section 34 of the Arbitration and Conciliation Act, 1996 did not change the insolvency character of the claim. The respondent was therefore treated as a financial creditor entitled to participate in the Committee of Creditors. Case-Laws IBC Fri, 06 Dec 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=762831