No Surprise Claims Can Be Flung Or Sprung Upon Corporate Debtor Once Resolution Plan Is Approved: Delhi High Court

The Delhi High Court ruled that the “clean slate” theory applies to all prior claims after the approval of a resolution plan by the NCLT. The court emphasized that once a resolution plan is approved, all previous claims against the debtor are extinguished. This ruling provides clarity on the finality of resolution plans under the Insolvency and Bankruptcy Code (IBC) and ensures that the debtor can start afresh. The decision underscores the importance of resolution plans in achieving effective insolvency resolution.