Secured creditors will stand in line with unsecured creditors. For unsecured lenders to receive any of their money back, there must be something left over after paying the secured creditors. Of the many twists and turns taken in the Essar bankruptcy, this is the most damaging. Under an agreement with the Essar creditors’ committee, ArcelorMittal’s offer would have made secured financial lenders more than 90% whole. While that’s a good recovery rate, it’s less than 100%, meaning unsecured operational lenders should have had to go empty-handed.

Source: Mint July 17, 2019 17:37 UTC