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2021 (6) TMI 1077 - Tri - Insolvency and BankruptcySeeking approval of the Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 (4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - HELD THAT - The proposed Resolution Plan meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38(1A) and 39 (4) of the Regulations. The Resolution Plan is not found in contravention of any of the provisions of Section 29A of the Code and is in accordance with Law. Hence the same deserves approval with following observation and direction to the CoC to make payments as per liquidation value to all the dissenting Financial Creditors in cash upfront before any payment is made to assenting Financial Creditors as per the judgment of the Hon'ble Supreme Court in the matter of Jaypee Kensington Boulevard Apartments Welfare Association Ors. vs. NBCC (India) Ltd. Ors. matter. 2021 (3) TMI 1143 - SUPREME COURT . It is to be ensured to make payment of statutory dues of its employees, ex-employees viz Gratuity, Provident Fund etc in full and on priority - application approved.
Issues Involved:
1. Approval of the Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with the Insolvency and Bankruptcy Code and associated regulations. 3. Distribution of payments to creditors, including operational and financial creditors. 4. Observations and suggestions by the Adjudicating Authority regarding the Resolution Plan. 5. Implementation and supervision of the Resolution Plan. 6. Appointment of an Observer Cum Permanent Invitee to ensure smooth functioning. 7. In-principle approval for the merger of companies involved in the Resolution Plan. Issue-Wise Detailed Analysis: 1. Approval of the Resolution Plan: The Resolution Professional (RP) sought approval for the Resolution Plan submitted by Twin Star Technologies Limited under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, read with Regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. The Plan was approved by the Committee of Creditors (CoC) with 95.09% voting share. 2. Compliance with the Insolvency and Bankruptcy Code and Associated Regulations: The RP certified that the Resolution Plan complied with all provisions of the Insolvency and Bankruptcy Code, 2016, and the CIRP Regulations. The Plan included an affidavit confirming the Resolution Applicant's eligibility under Section 29A of the Code. The CoC approved the Plan after considering its feasibility, viability, and compliance with the Code and Regulations. 3. Distribution of Payments to Creditors: The Plan provided for the payment of CIRP costs, debts of operational creditors, and financial creditors. The distribution included: - Secured Financial Creditors (Assenting): 4.89% - Secured Financial Creditors (Dissenting): 4.56% - Unsecured Financial Creditors (Assenting): 0.62% - Unsecured Financial Creditors (Dissenting): Nil - Operational Creditors: 0.72% The total claims admitted were ?64,838.63 crores, with the Plan approved for ?2,962.02 crores, representing only 4.15% of the total outstanding claim amount. 4. Observations and Suggestions by the Adjudicating Authority: The Adjudicating Authority observed that the Successful Resolution Applicant was paying a minimal amount, resulting in a significant haircut for creditors. It suggested that both the CoC and the Successful Resolution Applicant increase the payout amount to Operational Creditors, especially MSMEs. The Authority also noted the need for IBBI to ensure the confidentiality clause is followed and to examine the large number of representatives for the Applicant. 5. Implementation and Supervision of the Resolution Plan: The Plan included steps for delisting shares, merging companies, settling trust, capital reduction, infusion of funds, conversion of debt, and assignment of part debt. The RP and CoC were responsible for the implementation and supervision of the Plan. 6. Appointment of an Observer Cum Permanent Invitee: The Adjudicating Authority appointed Mr. R.K. Agarwal as an Observer Cum Permanent Invitee to the Steering Committee to ensure smooth functioning and changeover to the Successful Resolution Applicant. He was to be suitably compensated for his professional services. 7. In-Principle Approval for the Merger of Companies: The Adjudicating Authority granted in-principle approval for the merger of the companies involved in the Resolution Plan, subject to necessary approvals under applicable laws. Conclusion: The Resolution Plan submitted by Twin Star Technologies Limited was approved by the Adjudicating Authority, with directions to the CoC to ensure payments to dissenting Financial Creditors and statutory dues of employees and ex-employees. The Plan was found to be compliant with the Insolvency and Bankruptcy Code and associated regulations, and the implementation was to be supervised by the RP, CoC, and an appointed Observer Cum Permanent Invitee.
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