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2021 (10) TMI 1034 - Tri - Insolvency and BankruptcyApproval of resolution plan - section 30 (6) of Insolvency and Bankruptcy Code, 2016 read with section 31 of IB Code and Regulation 39 (4) of The Insolvency and Bankruptcy Board of India (Insolvency Process of Corporate Persons) Regulations, 2016 - HELD THAT - The Resolution Plan provides for the settlement of the claims of various stakeholders. The Resolution Plan also provides the background of the successful Resolution Applicant and its associates, and the financial capabilities of the successful Resolution Applicant. Hereafter, Resolution Plan is both feasible and viable, Resolution Plan also contains the procedure for its effective implementation of the Resolution Plan - the Resolution plan also provides for the appointment of RP as the person in charge to look after the implementation of the Resolution Plan. The Resolution Plan has also addressed the issues which resulted in the Insolvency of the Corporate Debtor and future business plan so as to such a situation does not arise again. The Resolution Plan' filed with the Application meets the requirements of Section 30 of IB Code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016 - resolution plan is approved - application allowed.
Issues Involved:
1. Approval of the resolution plan under section 30(6) of the Insolvency and Bankruptcy Code, 2016. 2. Constitution and actions of the Committee of Creditors (COC). 3. Valuation of the Corporate Debtor's assets. 4. Extension of the Corporate Insolvency Resolution Process (CIRP) period. 5. Publication and receipt of Expression of Interest (EOI). 6. Approval and details of the resolution plan. 7. Reliefs and concessions sought by the Resolution Applicant. 8. Compliance with statutory requirements and procedural formalities. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan: The application was filed by the Resolution Professional for the approval of the resolution plan under section 30(6) of the Insolvency and Bankruptcy Code, 2016 (IB Code) read with section 31 of the IB Code and Regulation 39(4) of the CIRP Regulations. The plan was approved by the COC with 100% voting. 2. Constitution and Actions of the Committee of Creditors (COC): The Corporate Debtor was admitted into CIRP on 18.03.2020, and the IRP constituted the COC, comprising one Financial Creditor and one Operational Creditor. The COC resolved to appoint the IRP as the Resolution Professional and also decided to appoint valuers and a Chartered Accountant for asset valuation. The COC rejected the proposal for a transaction audit due to high costs. 3. Valuation of Corporate Debtor's Assets: The registered valuers submitted a valuation report valuing the Corporate Debtor's assets at ?4,16,763/- as fair value and ?4,08,031/- as liquidation value. 4. Extension of CIRP Period: The COC resolved to file an application for an extension of the CIRP period by three months and exclusion of 76 days due to the gap between the pronouncement and receipt of the order. This was allowed by the Authority, extending the CIRP by 90 days beyond 180 days and excluding 76 days. 5. Publication and Receipt of Expression of Interest (EOI): The COC resolved to publish the EOI, which was published in two newspapers. One EOI was received from the Resolution Applicant, who submitted the resolution plan on 06.01.2021. 6. Approval and Details of the Resolution Plan: In the fifth COC meeting, the resolution plan was approved with 100% voting. The total claim made by all claimants was ?14.33 Crores, with a proposed payment of ?1,620,667/-, resulting in a 98.7% haircut. The plan included payments to unsecured financial creditors, operational creditors, and shareholders, with additional funds to be infused by the Resolution Applicant. 7. Reliefs and Concessions Sought by the Resolution Applicant: The Resolution Applicant sought various reliefs and concessions, including tax exemptions, waiver of claims by various authorities, and the ability to change the company's name and address. The Tribunal granted some reliefs and directed the Resolution Applicant to approach concerned authorities for others. 8. Compliance with Statutory Requirements and Procedural Formalities: The resolution plan complied with all requirements of Section 30(2) of the IB Code and relevant CIRP Regulations. The Tribunal noted that the plan was feasible and viable, addressing issues that led to the insolvency and providing a future business plan to prevent recurrence. The plan included the appointment of the RP to oversee implementation and reconstitution of the Board of Directors. Conclusion: The Tribunal approved the resolution plan, making it binding on the Corporate Debtor and all stakeholders. The Resolution Applicant was granted liberty to approach competent authorities for further reliefs and concessions. The Tribunal issued several directions to ensure the effective implementation of the resolution plan and compliance with statutory requirements.
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