Assets of Subsidiary Company not to be Included in Insolvency Resolution Plan of Holding Company: Supreme

The Supreme Court of India ruled that the assets of a subsidiary company cannot be included in the insolvency resolution plan of its holding company. This decision emphasizes the separate legal status of subsidiary companies, asserting that each entity's assets should be treated independently in corporate insolvency proceedings. The Court clarified that including a subsidiary’s assets in the resolution plan of the holding company is inconsistent with the principles of the Insolvency and Bankruptcy Code (IBC), which distinctly recognizes the assets of the corporate debtor and its subsidiaries. This decision protects the legal and financial boundaries between holding and subsidiary companies during insolvency proceedings.