In Brief
A company director appealed against an order refusing to halt the corporate insolvency process for a manufacturing firm, despite the parties reaching an out-of-court settlement. The Supreme Court held that before a creditors' committee is constituted, the tribunal can use its inherent powers to permit withdrawal of an insolvency petition if disputes have been settled, after hearing all parties. The Court found that settlements cannot be blocked in anticipation of other claims, and that allowing withdrawal does not prevent other creditors from pursuing action under insolvency law. The appeal was dismissed and the tribunal was directed to hear the settlement application afresh.
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