Resolution Professional Entitled to determine Related Party Status of Creditor: NCLAT

Resolution Professional Entitled to Determine Related Party Status of Creditor: NCLAT: The National Company Law Appellate Tribunal (NCLAT) has ruled that the Resolution Professional (RP) is entitled to determine the related-party status of a creditor in a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). The tribunal clarified that the RP has the discretion to decide whether a creditor is a related party based on the financial relationships and transactions that may influence the insolvency process. This decision strengthens the RP’s role in ensuring that creditors are not unduly favored during the resolution process, particularly in cases where there is a potential conflict of interest or influence over the debtor company’s affairs.