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CS Professional · Corporate Restructuring, Valuation and Insolvency · Cross Border Insolvency

In a bankruptcy proceeding, trustee Mr Sunil Batra suspects that a personal guarantor of a corporate debtor holds shares in a country with which India has reciprocal arrangements under section 234. Can section 235 be invoked?

Yes. Section 235 covers assets of a debtor, including a personal guarantor of a corporate debtor, and applies in bankruptcy proceedings. The bankruptcy trustee can apply to the Adjudicating Authority, which may issue a letter of request if satisfied. Consent of the guarantor is not needed.

  1. ANo, section 235 covers only corporate debtors
  2. BNo, personal guarantors are governed only by foreign law
  3. CYes, but only after the guarantor consents
  4. DYes, section 235 covers assets of a debtor, including a personal guarantor of a corporate debtor, in bankruptcy proceedingsCorrect

Explanation

Section 235(1) applies to assets of the corporate debtor or debtor, including a personal guarantor of a corporate debtor, and expressly covers bankruptcy proceedings with the bankruptcy trustee applying. The guarantor's consent is not required.

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