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NCLAT Clarifies that Accounting Set-Offs May Constitute Preferential Transactions under s. 43 of the IBC
The NCLAT clarifies that accounting set-offs may constitute preferential transactions under s. 43 of the IBC where they result in the extinguishment of receivables and confer a benefit on related parties. The ruling reinforces a substance-over-form approach and underscores that even non-cash adjustments impacting the asset pool of the corporate debtor are subject to avoidance.
Apr 64 min read