Examples of Corporate Guarantors in a sentence
In Piramal, although Financial Creditor took pains to secure same amount by ensuring that two Corporate Guarantors are there (which is not prohibited by law) the Corporate Guarantor No. 1 simply walked away only because, CIRP had already been initiated against Corporate Guarantor No. 2.
Without initiating any CIRP against the Principal Borrower, it is always open to the Financial Creditor to initiate CIRP under Section 7 against the Corporate Guarantors, as the creditor is also the Financial Creditor qua Corporate Guarantor.
Ramakrishna.Considering the issues which were before the NCLAT when matter of Piramal was decided, it is clear that the Issue No.2 was relating to question whether CIRP can be initiated against two Corporate Guarantors simultaneously for same set of debt and default.
Two Members’ bench of the NCLAT in the Pirmal case held that:It is not necessary to initiate CIRP against the Principal Borrower before initiating CIRP against the Corporate Guarantors.
Further, though there is a provision to file joint application under Section 7 by the Financial Creditors, no application can be filed by the Financial Creditor against two or more Corporate Debtors on the ground of joint liability (Principal Borrower and one Corporate Guarantor, or Principal Borrower or two Corporate Guarantors or one Corporate Guarantor and other Corporate Guarantor), till it is shown that the Corporate Debtors combinedly are joint venture company.