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2024 (10) TMI 15 - Tri - IBCSeeking grant of permission to Applicant to distribute the unsold assets being the amount recoverable from the corporate debtor and its erstwhile management under the action to be initiated against their previous preferential, undervalued and fraudulent transactions amongst the Respondents - HELD THAT - In the 5th SCC meeting held on 22.01.2024, it is seen that the Liquidator has proposed to assign the right to file PUFE proceedings for avoidance/recovery of amounts contemplated under the M.A.No. 1080 of 2019 (now disposed with liberty to file fresh proceedings). The assignment was accepted by VS B Containers LLC during the meeting. It is seen that SCC with 66.82% voting (majority) resolved that the right to file PUFE proceedings for avoidance, recovery of amounts contemplated under M. A. No.1080 of 2019 (now disposed with liberty to file fresh proceedings) shall be assigned to Stakeholder - VS B Containers LLC. It has been further resolved by SCC that, if recovery of any amounts is successful, VS B Containers LLC shall share the amounts recovered with other Shareholders as per the claim sharing ratio of the Stakeholders. It is ordered that the right to recover from PUFE proceedings shall be assigned to Stakeholder - VS B Containers LLC. The amount recovered if any, shall be shared. Application disposed off.
Issues:
1. Application filed under section 60 (5) of the IBC, 2016 r/w Regulation 38 of IBBI seeking reliefs for distribution of unsold assets. 2. Liquidation process and distribution of assets among stakeholders. 3. Assignment of not readily realizable assets (NRRA) through public e-auction. 4. Approval and resolution regarding the assignment of the right to file PUFE proceedings for recovery of amounts. Analysis: 1. The Applicant filed an application under section 60 (5) of the IBC, 2016 seeking permission to distribute unsold assets and recover amounts from the corporate debtor and its erstwhile management. The application also requested other orders deemed fit by the Tribunal. The factual matrix outlined the Corporate Debtor's insolvency resolution process, liquidation order, stakeholder claims, and the opening of a liquidation account. 2. The Applicant, acting as the Liquidator, initiated the process of distributing amounts realized to creditors proportionately. Efforts were made to sell physical assets, including two vehicles, with one vehicle being sold and the other found damaged and subsequently sold to a scrap dealer. The Applicant also sought extensions for the liquidation process to complete pending tasks efficiently. 3. The Applicant pursued the recovery of amounts from Preferential, Undervalued, and Fraudulent Transactions through legal proceedings. The Tribunal had previously passed orders against certain respondents, leading to subsequent applications for setting aside ex-parte orders. The Tribunal dismissed the previous application, allowing the Applicant to file a fresh one. The assignment of not readily realizable assets (NRRA) was discussed in a stakeholders' committee meeting, leading to a decision for public e-auction. 4. The Applicant published public notices for the assignment of NRRA through e-auction but did not receive any bids. Despite considerable time and effort spent on public auctions, the NRRA assets remained unsold. To avoid further delays in the liquidation process, the Applicant sought permission to distribute the unsold NRRA assets among stakeholders. The Tribunal, considering the resolution passed in a stakeholders' meeting, ordered the assignment of the right to file PUFE proceedings for recovery of amounts to a specific stakeholder. In conclusion, the Tribunal disposed of the application, directing the assignment of the right to recover from PUFE proceedings to a designated stakeholder, with a provision for sharing the recovered amounts among shareholders according to the claim sharing ratio.
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