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At the time of liquidation reg

Others 263 views 2 replies

Marimuthu

Manager

528 Points Posted on 06 September 2018

Dear Sir,

1. A public limited company issued the securities as follow:

a. Secured Dentures
b. Unsecured Debentures
c. Preferance Shares &
d. Equity Shares.

2. At the time of liquidation, who will be giving the priority to settle the debt after settlement to Creditors?.

Kindly explain

Thank you.

With regards,

R. Marimuthu

Replies (2)

Pranjali

intern

2216 Points Posted on 06 September 2018

After the settlement of creditors, you settle secured debentures and then unsecured. Since, shareholders have a claim over ONLY the residual part of the company. So even after the settlement of debentures, the primary claim is of the preference shareholders and at last the equity shareholders.

Hope it helped.

Let me know if there are any further queries :)

Marimuthu

Manager

528 Points Posted on 06 September 2018

Thank you for your reply,

In such cases, in which the unsecured debentures were issued with Pari-Passu clause, how the settlement will be done between Secured and unsecured dentures holders.?

Kindly explain.

With Regards,

R. Marimuthu.