Recently, in the case of Binani Cement, the Kolkata bench of NCLT approved the resolution plan of UltraTech Cement which was higher than what the Dalmia Bharat group had to offer even after the Committee of Creditors (CoC) earlier selected them as the higher bidder. The case debated a lot on value maximisation in a corporate resolution plan.

“In Binani, the one which was approved was within the rules. The one which was rejected was because it was not balancing the interest of the stakeholders,” IBBI chairman M S Sahoo told PTI when asked about resolutions of Essar Steel and Binani Cement. “Value maximisation is the assets of the debtor and not of the creditor. This is not a recovery by finance institutes but value maximisation is for the corporate debtor,” he said. If the CoC has approved “within the process”, then it is valid for both Binani as well as ArcelorMittal.

The Committee of Creditors (CoC) is supreme in commercial matters but that supremacy has to be within the framework of law, he pointed out. “We continue to believe that our settlement proposal of Rs 54,389 crore is the most compelling one available to Essar Steel creditors and fulfills the IBCs declared overriding objective of value maximisation, which has been established time and again by courts at all levels,” Essar said in their reaction after the NCLT approval.

“EXIM Bank decided to pursue the case before the adjudicating authority, with a prayer for equitable and fair treatment to all, while maximising the value detected …We are happy that the judgement has agreed with the basic tenets of our stand and cemented a new perspective to the IBC,” a senior Exim Bank official had commented.