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2022 (3) TMI 1396 - Tri - Insolvency and BankruptcySeeking direction to Liquidator to accept the Global Corp Logistics LLC as base price - direction to Liquidator to conduct Swiss challenge among the prospective applicants including the interest received after the specified timelines for value maximization - HELD THAT - It is relevant to refer RAVI DEVELOPMENT VERSUS SHREE KRISHNA PRATHISTHAN AND ORS. in which the Hon ble Supreme Court has held with respect to adoption of Swiss Challenge Method that The method is transparent inasmuch as all the parties were well aware of the right of first refusal accorded to the originator of proposal . As per the method which was known to all the parties the originator of the proposal must in consideration of his vision and his initiative be given to the benefit of matching the highest bid submitted. Further has also held that an unsolicited bid or a proposal received from a developer can thus be subjected to a bidding process by different modes including the Swiss challenge method. The Applicant/ Liquidator is hereby allowed to fix Proposal -A as base price and accordingly adopt Swiss Challenge Method including the proposals received after the specified timeline considering the fact of maximization of the value of the Corporate Debtor - Application allowed.
Issues:
1. Application seeking reliefs under section 60(5) of Insolvency and Bankruptcy Code, 2016. 2. Liquidation process and stakeholder meetings for M/s. St. John Freight Systems Limited. 3. Consideration of proposals from Global Corp Logistics LLC and Galaxy Freight Private Limited. 4. Voting results and decision-making process for selecting the base price and adoption of Swiss Challenge Method. Issue 1: Application seeking reliefs under section 60(5) of Insolvency and Bankruptcy Code, 2016 The Applicant, acting as the Liquidator of M/s. St. John Freight Systems Limited, filed an application seeking various reliefs under section 60(5) of the Insolvency and Bankruptcy Code, 2016. The reliefs included directing the Liquidator to accept Global Corp Logistics LLC as the base price and conducting a Swiss challenge among prospective applicants for value maximization. Issue 2: Liquidation process and stakeholder meetings for M/s. St. John Freight Systems Limited The Applicant, appointed as the Interim Resolution Professional and subsequently as the Resolution Professional, initiated the liquidation process after the resolution plan was deemed commercially unviable. Various steps were taken, including the verification of claims, formation of a consultation committee, and public announcements. The business was operated as a Going Concern, branches were closed, and employees were discharged. Regular progress reports were submitted, and expressions of interest were invited from potential buyers. Issue 3: Consideration of proposals from Global Corp Logistics LLC and Galaxy Freight Private Limited After receiving proposals from Global Corp Logistics LLC and Galaxy Freight Private Limited, stakeholder committee meetings were held to discuss and finalize the offers. Detailed comparisons of the proposals were made, leading to the rejection of certain proposals. Ultimately, two proposals were finalized, and resolutions were passed to proceed with either proposal or conduct a Swiss challenge for maximizing value. Issue 4: Voting results and decision-making process for selecting the base price and adoption of Swiss Challenge Method During stakeholder committee meetings, voting was conducted to determine the acceptance of proposals. The voting results indicated preferences and rejections for the proposals. Due to the inability to secure a 66% stakeholder vote, Proposal-A was set as the base price, and the Swiss Challenge Method was adopted to consider other prospective buyers' offers received after the specified timeline. In conclusion, the National Company Law Tribunal, Chennai, allowed the Applicant/Liquidator to fix Proposal-A as the base price and adopt the Swiss Challenge Method to maximize the value of the Corporate Debtor. The decision was based on the need for transparency and value maximization in the liquidation process, as highlighted in relevant legal precedents.
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