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Tag: Bankruptcy

Corporate lenders vs taxman: Round one of bankruptcy bout goes to the lenders

Corporate lenders vs taxman: Round one of bankruptcy bout goes to the lenders

Finance
Administrators selling off bankrupt companies, or their assets piecemeal, need not worry about claims from the income tax authorities. In the pecking order on recoveries, the taxman ranks below the lenders, says a ruling by the National Company Law Appellate Tribunal (NCLAT). The ruling is set to give comfort to lenders looking to recover money without having to worry about the tax implications. Liquidators at S.Kumars had dragged the income tax department to NCLAT after they sold off some of the assets of the company to UPL limited for Rs 43 crore. The tax department was of the view that 1% tax must be paid (tax deducted at source) in this transaction. The liquidator on the other hand contested that in the “waterfall mechanism”, the tax department cannot supersede corporate lenders. “W...
McKinsey faces criminal inquiry over bankruptcy case conduct

McKinsey faces criminal inquiry over bankruptcy case conduct

Finance
By: Mary Williams Walsh and Emily Flitter McKinsey & Co., the elite consulting firm that advises many of the world’s largest and most powerful institutions, is facing a federal criminal investigation of its conduct advising bankrupt companies, according to five people familiar with the matter. Prosecutors and other Justice Department officials in New York and Washington are trying to determine if McKinsey used its influence over insolvent companies in violation of the rules of Chapter 11 bankruptcy — where billions of dollars can change hands — by quietly steering valuable assets to itself or favoring its own clients over other creditors. Gary Pinkus, McKinsey’s North America chairman, said the firm received an inquiry from the U.S. attorney’s office in Manhattan last year and addresse...

After bankruptcy filing, Purdue Pharma may not be off hook

Health
OxyContin maker Purdue Pharma and its owners expressed sympathy but not responsibility for the nation's opioid crisis as the company filed for bankruptcy protection late Sunday night, part of a move to settle some 2,600 lawsuits — most from state and local governments. "Like families across America, we have deep compassion for the victims of the opioid crisis," Sackler family members said in the statement, which called the settlement plan a "historic step towards providing critical resources that address a tragic public health situation." But the filing may not get either the drugmaker or the Sacklers off the legal hook. About half the states and lawyers representing at least 1,000 local governments have agreed to the tentative settlement, which the company says could be worth $ 10 billi...
US retail giant Sears files for bankruptcy

US retail giant Sears files for bankruptcy

Business
US retail giant Sears has filed for bankruptcy after succumbing to huge debts and losses. The company, which is more than 100 years old, was once America's largest retailer but has been battered by fierce competition and the rise of internet shopping.Sears, which still has 886 stores across the US, was left fighting for its life ahead of a key $ 134m (£102m) debt repayment due at the start of this week.Court papers showed it had now filed for Chapter 11 bankruptcy, a process that allows indebted companies to restructure its debts.Sears began life as a mail order catalogue in the 1880s - a pioneering business that has been described as the Amazon of its day.It came to dominate US malls and at its peak sales were equivalent to 1% of US gross national product. It was over...
PNB hires lawyers to represent itself in bankruptcy proceedings of Nirav Modi firm in US

PNB hires lawyers to represent itself in bankruptcy proceedings of Nirav Modi firm in US

Finance
NEW DELHI: State-owned Punjab National Bank (PNB) has hired lawyers to represent itself in the bankruptcy proceedings of the US-based Firestar Diamond, a group company of billionaire diamantaire Nirav Modi who is accused of defrauding the lender of over Rs 13,000 crore.Firestar Diamond approached a bankruptcy court in New York court in February."We have just engaged lawyers to represent our bank in the US bankruptcy petition as part of recovery process. If money has gone from our system and parked in that company, our bank's views should be heard before deciding about insolvency petition," PNB Managing Director Sunil Mehta said.Without disclosing the name of the lawyers, he said the bank is legally engaged in the matter of insolvency proceedings of Firestar Diamond and the concerned author...