This example has been simplified to show the mechanics of a waterfall payment scheme. In fact, some cascade systems are structured so that minimum interest payments are made at all levels during each payment cycle. On the other hand, the complainant banks argued that the facilities agreement clearly distinated the different capabilities and roles of the facility officer, the security officer, the security lender and the lender, although BLB performed all of these tasks at the time of the agreement. The complainant banks also submitted that the construction of clause 9.7 a by BLB would include BLB as a lender and that BLB, as a lender, would have priority over other lenders, which is inconsistent with the other sub-clauses in item 9.7. The first step of the stunt is to return to the LP at least the amount it was called. Here we find a lot of variation on what exactly needs to be returned. This is generally the capital required for investments, as well as certain expenses and royalties. Section 9.7, point a), of the water-of-payment case, was intended to give priority to the reimbursement of expenses, fees and expenses incurred by the representative of the facility in the exercise of this role of lender representative. It was economically wise for the facility representative to recover these costs, fees and expenses as a priority for the lenders, without subsidizing them, since he was acting as the lenders` representative, and they had committed to compensate them elsewhere in the facility agreement. The interbank agreement between the creditors provides for a provision in the cascade that states that if the debtor breaks down and the creditors have to withdraw or liquidate collateral, the cascade reserve is triggered. Due to differences in interest rates, creditors will receive a substantial profit of approximately $90 million from 2007 creditors in the event of distribution under the cascade reserve in 2011. To demonstrate the operation of a cascading payment system, we assume that a company has taken out loans from three creditors, creditors A, B and creditors C.
The system is structured so that creditors A are the highest creditors, while creditors C are the lowest creditors. The scheme for what the business owes each of the creditors is as follows: NCLAT has accepted the respondents` assertion that tips and social security contributions cannot be included in the waterfall mechanism in accordance with Section 36 iBC. This provision obliges the liquidator to form an estate of the estate of the company`s debtor. It then excludes from the amount of liquidation assets any amount owed to a worker or worker with respect to contingency funds, pension funds and tipping funds, so that these sums are not used for liquidation recovery.