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CS Professional · Corporate Restructuring, Valuation and Insolvency · Liquidation on or after Failing of Resolution Plan

In the liquidation of Gange Foods Ltd, sale proceeds are limited. Which of the following ranks lowest in the order of priority under section 53 among the options given?

Equity shareholders rank lowest under the section 53 waterfall, at clause (h), after preference shareholders. Insolvency resolution process costs, workmen's dues and unsecured financial debts all rank above them and are paid first.

  1. AInsolvency resolution process costs
  2. BWorkmen's dues for the 24 months preceding the liquidation commencement date
  3. CFinancial debts owed to unsecured creditors
  4. DEquity shareholdersCorrect

Explanation

Section 53(1) places equity shareholders or partners at (h), the last rank. Resolution process costs are at (a), workmen's dues at (b) and unsecured financial debts at (d), all of which rank above equity shareholders.

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