2022 (3) TMI 815 - Tri - Insolvency and Bankruptcy

Seeking distribution of unsold assets of the Corporate Debtor amongst the stakeholders in proportion of their claim - regulation 38(1) of the Insolvency and Bankruptcy Board of India Liquidation Process Regulations, 2016 - HELD THAT - The financial creditor/stakeholders have submitted their consent to the proposed distribution of assets amongst them in proportion of their claim and have agreed to get the shares/assets transferred at their own cost and convenience after the issuance of asset distribution certificate/offline delivery instruction slip by the Liquidator. There is no impediment to the proposed scheme of distribution and it is ordered accordingly - Petition disposed off.

Summary

Issues Involved:
Application for distribution of unsold assets among stakeholders in a liquidation process.

Analysis:
The judgment pertains to an application filed under regulation 38(1) of the Insolvency and Bankruptcy Board of India [Liquidation Process] Regulations, 2016, seeking the distribution of unsold assets of a Corporate Debtor among stakeholders in proportion to their claims. The Liquidator of the Corporate Debtor, appointed by the Adjudicating Authority in a previous order, presented the application. The Corporate Debtor had no fixed assets and no receivable dues, but possessed financial assets of a peculiar nature that were challenging to sell or transfer readily. These assets included quoted and unquoted shares in various companies, short-term loans, and bank account balances. The Liquidator highlighted the difficulties in recovering these assets promptly, which could prolong the liquidation process and escalate costs. The stakeholders had consented to the proposed distribution of assets based on their claims and agreed to bear the costs of transferring the shares/assets after receiving the necessary documentation from the Liquidator.

The court considered the submissions made by the Applicant and the stakeholders, confirming their agreement to the proposed distribution scheme. With no obstacles identified, the court approved the distribution of financial assets among stakeholders as per the proposed plan. The court directed the closure of the relevant applications and relieved the Liquidator from responsibilities, subject to procedural requirements. Any future realizations from assets would be deposited into the Corporate Liquidation Account managed by the Insolvency and Bankruptcy Board of India, with entitled stakeholders able to request withdrawals from the account. The Registry was instructed to disseminate the order to all parties promptly, and certified copies would be issued upon compliance with necessary formalities.