2021 (8) TMI 53 - Tri - Insolvency and Bankruptcy

Seeking Liquidation of Corporate Debtor - submission of application is that no prejudice is caused in the event an order for commencement of liquidation of the Corporate Debtor is passed by this Tribunal - Section 33 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Process of Liquidation of the Corporate Debtor Tribhovandas Bhimji Zaveri Sons Retail Private Limited shall commence as per the Chapter III of the I B Code from date of this Order. Application allowed.

Summary

Issues:
Liquidation Process of Corporate Debtor Tribhovandas Bhimji Zaveri & Sons Retail Private Limited

Detailed Analysis:

1. Liquidation Application Under Section 33 of IBC:
The Resolution Professional sought direction for the Liquidation Process of the Corporate Debtor, requesting the initiation of liquidation and appointment of a Liquidator. The Tribunal was approached for appropriate orders in this regard.

2. Brief Facts and Background:
The Corporate Debtor was incorporated for retailing jewelry and similar items. The CIRP was initiated in response to an Operational Creditor's application, leading to the appointment of an Interim Resolution Professional and subsequently, the Resolution Professional. Challenges arose due to non-cooperation from the previous management, hindering the RP's efforts to gather information on the Corporate Debtor's assets.

3. Fraudulent Activities Apprehension:
The RP suspected fraudulent asset diversion by the previous management, supported by a Transaction Audit Report. An application under Sections 43 and 66 of IBC was filed, highlighting potential fraudulent transactions during the Corporate Debtor's previous management.

4. Resolution Efforts and Lack of Resolution Plan:
Despite efforts to attract Resolution Applicants, only one Expression of Interest was received, which did not materialize into a Resolution Plan due to insufficient information on the Corporate Debtor's assets and trademark usage rights. Consequently, the CoC decided to liquidate the Corporate Debtor.

5. Decision to Liquidate and Resolution by CoC:
The CoC, in its Eighth Meeting, unanimously resolved to liquidate the Corporate Debtor due to the absence of a viable Resolution Plan. The CoC approved the liquidation, considering the estimated costs and available liquid assets of the Corporate Debtor.

6. Appointment of Liquidator and Fee Fixation:
The CoC suggested and approved the appointment of a specific Insolvency Professional as the Liquidator, along with fixing the Liquidator's fee as per the regulations. The chosen Liquidator provided written consent for the role.

7. Liquidation Order and Further Directions:
The Tribunal ordered the commencement of the liquidation process, appointed the chosen Liquidator, and directed necessary actions to be taken. The Liquidator was authorized to represent the Corporate Debtor before authorities and seek directions from the Tribunal as required during the liquidation process.

8. Conclusion:
The Tribunal allowed the application for liquidation, emphasizing the maximization of the Corporate Debtor's value for stakeholders. The order for liquidation was issued, outlining the responsibilities and actions to be undertaken by the appointed Liquidator in the process.