2021 (6) TMI 700 - Tri - Companies Law

Approval of Composite Scheme of Arrangement - section 230-232 provisions of the Company Act, 2013 read with Insolvency Bankruptcy Code, 2016 and Regulation 32 of IBBI (Liquidation Process) Regulations, 2016 and under Rule 3(1) of the Companies (Compromise, Arrangement Amalgamation) Rules, 2016 - HELD THAT - On perusal of the documents submitted by the Liquidator of the Corporate Debtor and also the Scheme placed by a Liquidator in relation to a Company under Liquidation under Section 230 of the Companies Act, 2013, the scheme is required to be approved - necessary directions issued for convening the meetings of the stakeholders comprising of Secured Creditors, Unsecured Creditors and other creditors and Members of the Company; however, suitably modified to suit the present instance taking into consideration the facts and circumstances of the case. Application disposed off.

Summary

Issues:
1. Application filed by Liquidator under Company Act, 2013 and Insolvency Bankruptcy Code, 2016 for a Composite Scheme of Arrangement.
2. Directions for convening stakeholders' meeting and publication of advertisements.
3. Appointment of Liquidator and confirmation by Committee of Creditors.
4. Submission and consideration of Scheme of Arrangement.
5. Details of Transferor Company, Resulting Company, and Individual Investor.
6. Composition of Stakeholders Committee and details of creditors.
7. Directions for Stakeholders Committee meetings, representation, and voting.
8. Publication of notices, voting procedures, and meeting arrangements.
9. Compliance with statutory authorities and submission of reports.

Analysis:
1. The judgment involves an application by the Liquidator under the Company Act, 2013 and Insolvency Bankruptcy Code, 2016 for a Composite Scheme of Arrangement involving multiple companies and individuals. The Liquidator sought directions for convening stakeholders' meetings, publication of advertisements, and notices to statutory authorities as per the provisions of the Act and relevant rules.

2. The Liquidator's appointment and confirmation by the Committee of Creditors were highlighted, indicating the procedural history leading to the current application. The Scheme of Arrangement submitted by Resolution Applicants was the basis for the application, emphasizing the importance of stakeholder meetings for passing resolutions.

3. Detailed information about the Transferor Company, Resulting Company, and Individual Investor was provided, outlining their roles and contributions to the proposed Scheme. The composition of stakeholders, including equity shareholders, secured and unsecured creditors, operational creditors, workmen, and employees, was thoroughly documented.

4. The judgment laid out directions for the Stakeholders Committee meetings, representation, and voting procedures. The Liquidator was instructed to constitute the Committee, circulate notices, and conduct meetings within specified timelines, ensuring the participation of various stakeholders in the decision-making process.

5. Provisions were made for publication of notices, voting procedures, and arrangements for physical or electronic meetings based on prevailing circumstances and legal requirements. The judgment emphasized compliance with statutory authorities and the submission of reports by the Liquidator regarding meeting outcomes and scheme approval.

6. Overall, the judgment provided a comprehensive framework for the consideration and approval of the Scheme of Arrangement, ensuring transparency, stakeholder participation, and adherence to legal procedures and regulations. It underscored the importance of stakeholder engagement and procedural compliance in the corporate resolution process under the relevant laws and regulations.