Business Studies · Insolvency and Bankruptcy Code
According to the Insolvency and Bankruptcy Code (IBC), 2016, which statement correctly represents the 'Waterfall Mechanism' priority for the distribution of liquidation proceeds?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Unsecured financial creditors rank below the dues owed to State Governments.
- 2Equity shareholders are paid before preference shareholders.
- 3Workmen's dues for a period of 24 months rank pari passu with secured creditors who have relinquished security.✓
- 4Secured creditors rank below Central Government dues.
Correct answer
Workmen's dues for a period of 24 months rank pari passu with secured creditors who have relinquished security.
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