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      Question

      Which statement is correct regarding the role and rights

      of unsecured creditors under the SARFAESI Act versus the IBC?
      A SARFAESI gives extensive voting rights to unsecured creditors, whereas IBC excludes them Correct Answer Incorrect Answer
      B SARFAESI gives no rights to unsecured creditors, but IBC gives them a voice, a place in the liquidation priority, and an attendance right in the CoC as operational creditors Correct Answer Incorrect Answer
      C Both laws treat secured and unsecured creditors with exactly equal priority Correct Answer Incorrect Answer
      D Unsecured creditors can initiate SARFAESI, but cannot file applications under the IBC Correct Answer Incorrect Answer
      E Under the IBC, unsecured creditors are paid before the costs of the insolvency process Correct Answer Incorrect Answer

      Solution

      SARFAESI provides no rights to unsecured creditors. Under the IBC, unsecured creditors (as operational or unsecured financial creditors) get a voice, can attend CoC meetings, and have a defined place in the liquidation waterfall.

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