Debtor’s Rights and Participation in Liquidation

 

Debtor’s Rights and Participation in Liquidation

Even though the debtor loses control over its business once liquidation begins, it still retains certain rights during the liquidation process:

1. Right to Challenge Liquidation:

   • The debtor can challenge the decision to liquidate the company in the NCLT if it believes that the liquidation is premature or that the resolution process can still be revived.

2. Right to Participate in Liquidation Proceedings:

   • The debtor, through its representatives, has the right to participate in liquidation proceedings and can provide input on how assets should be sold or claims verified.

3. Cooperation with the Liquidator:

   • The debtor must cooperate with the liquidator by providing all necessary documents, assets, and other resources required to facilitate the liquidation.

4. Right to Receive Distribution:

   • If there are any proceeds left after all creditors are paid, the debtor (or its shareholders) may receive the residual assets.