9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 1439 - Tri - Insolvency and BankruptcyPlacing Resolution Plan for consideration before the CoCs - Held that - In spite of Information Memorandum being shared and Resolution Plans circulated amongst the CoC Members, the same were not taken up for discussion. The potential Resolution Applicant was called by the Resolution Professional for discussion with the CoCs in the last two CoCs meetings, the CoCs refused to take up that agenda for the reasons not known to the Resolution Professional and the Resolution Applicant. Besides this, the maximum period of CIRP as provided under the provisions of Section 12 of the I&B Code, 2016 has already got expired. Moreover, it has been submitted by the Resolution Professional that during the CIRP, M/s. Pepsi Co., has terminated the contract which was the only contractual arrangement for running the business of the Corporate Debtor that has caused the Corporate Debtor to run high and dry without any business to do on its own. Thus, the Corporate Debtor has suffered huge loss and lost its concept of going concern . In view of the circumstances stated above and the cold response of the CoCs towards the Resolution Plan circulated, there does not appear any reasonable ground for giving the direction to the Resolution Professional and the CoCs to consider their proposed Resolution Plan , as the same will be an exercise in futility.
Issues:
1. Consideration of Resolution Plan by CoCs 2. Allegations of improper evaluation by Resolution Professional 3. Request for extension of CIRP period Analysis: Issue 1: Consideration of Resolution Plan by CoCs The Tribunal considered the application filed by the Resolution Applicant against the Resolution Professional and the Members of the Committee of Creditors (CoCs) requesting direction to place the 'Resolution Plan' for consideration before the CoCs. The Resolution Plan proposed the takeover of the Corporate Debtor on an "as is where is" basis with a consideration of ?71.17 crores, outlining payment mechanisms for stakeholders. The Resolution Applicant alleged that despite multiple invitations to present the Plan before the CoCs, they were not given the opportunity for discussion or consideration. The CoCs, in response, raised concerns about the valuation of assets and transactions involving the Resolution Applicant and the Corporate Debtor. The Tribunal noted the lack of discussion on the Resolution Plan despite sharing among CoC Members and ultimately rejected the application, citing the expired CIRP period and lack of reasonable grounds for directing consideration of the Plan. Issue 2: Allegations of improper evaluation by Resolution Professional The Resolution Applicant contended that the Resolution Professional failed to adequately evaluate the assets of the Corporate Debtor and the Promoters, leading to discrepancies in the valuation provided in the Resolution Plan. The CoCs highlighted transactions between the Resolution Applicant and the Corporate Debtor, urging scrutiny under relevant sections of the Insolvency and Bankruptcy Code, 2016. The CoCs also requested an extension of time and replacement of the Resolution Professional. However, the Tribunal observed that despite the concerns raised, the Resolution Plan was not discussed, and the CIRP period had expired, further emphasizing the lack of grounds for directing consideration of the Plan. Issue 3: Request for extension of CIRP period The Resolution Professional mentioned the termination of a crucial contract by M/s. Pepsi Co., which significantly impacted the Corporate Debtor's operations, leading to substantial losses and hindering its status as a "going concern." The CoCs reiterated the need for an extension of the CIRP period, exclusion of time consumed by the current Resolution Professional, and the appointment of a new Insolvency Resolution Professional (IRP). Despite these requests, the Tribunal found no reasonable basis to compel consideration of the Resolution Plan, ultimately rejecting the application. In conclusion, the Tribunal dismissed the application filed by the Resolution Applicant, emphasizing the lack of grounds for directing the Resolution Professional and the CoCs to consider the proposed 'Resolution Plan,' given the expired CIRP period and the CoCs' cold response towards the Plan.
|
