Personal guarantors risk losing wealth

The Supreme Court of India has upheld the validity of provisions in the Insolvency & Bankruptcy Code that allow action to be taken against personal guarantors. This means that personal guarantors who have been taken to the National Company Law Tribunal for personal insolvency may face the loss of their wealth and assets, as well as various restrictions during bankruptcy proceedings. The decision is expected to lead to an increase in the number of cases filed against ousted promoters who have lost control of their companies due to loan defaults.

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