Why last-in-queue lenders file most insolvency pleas

Yet, such parties have triggered 44% of corporate insolvencies this year, according to the latest data from IBBI

India’s new bankruptcy law is getting maximum traction from an unusual set of lenders, those with the least to gain from pushing companies into the insolvency process.

Operational or unsecured creditors, who have dues that are not backed by any collateral, would be last in queue to be repaid once an insolvency plea succeeds in the National Company Law Tribunal (NCLT). Yet, such parties have triggered 44 per cent of corporate insolvencies this year, according to the latest data from the Insolvency and Bankruptcy Board of India (IBBI). Financial or secured creditors were responsible for 32 per cent of successful