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2021 (12) TMI 1239 - Tri - Insolvency and BankruptcySeeking directions to be issued to the Respondents to make contributions to the corpus fund as approved by the Committee of Creditors (CoC) to meet and support the Applicant to keep the Corporate Debtor Company as a going concern - HELD THAT - It is seen from the records that the corpus was created and unanimously approved in the meetings of the CoC held on 14.12.2018, 16.12.2019 and 07.09.2020 respectively. The said corpus was created to keep the Corporate Debtor Company as a going concern, to protect and preserve the assets and to meet the costs and expenses incurred in the CIRP. Further the instalments of corpus had been approved and created by the requisite majority of the CoC members. It is seen that there are pending contributions from the Respondents towards the said approved corpus. Therefore, in view of the urgent need for the funds and in absence of any alternate source of funds for running of the Consolidated CIRP of the Corporate Debtor Company and to keep the Corporate Debtor Company as a going concern, this Bench hereby directs the Respondents as mentioned in paragraph no. 17 to make payments towards their respective share of pending contributions to the corpus as approved by the CoC, within 15 days from receiving the Certified copy of the Order, to enable the Applicant to operate the business of the Corporate Debtor as a going concern to preserve and protect the assets during the CIRP and meet the costs and expenses incurred during the CIRP of the Corporate Debtor. Application allowed.
Issues: Application seeking directions for contributions to corpus fund approved by Committee of Creditors to support Corporate Debtor during Insolvency Resolution Process.
Analysis: 1. Issue: Approval and creation of corpus fund by Committee of Creditors (CoC). - The application sought directions for respondents to contribute to the corpus fund approved by CoC to support the Corporate Debtor during the Corporate Insolvency Resolution Process (CIRP). - The corpus fund was unanimously approved in various CoC meetings held on different dates. 2. Issue: Financial challenges faced by the Corporate Debtor. - The applicant highlighted the financial challenges faced by the Corporate Debtor due to inadequate funds, affecting day-to-day operational requirements. - The Corporate Debtor, engaged in a township project, faced issues like pending approvals, non-payment by residents for services, and revenue loss. 3. Issue: Delay in contributions leading to financial strain. - Delays in contributions from CoC members impacted the Corporate Debtor's ability to make crucial payments, affecting asset preservation and operational efficiency. - Despite approvals for creation of corpus funds, some members failed to make timely payments, causing financial strain on the Corporate Debtor. 4. Issue: Creation of multiple corpus funds to meet various expenses. - CoC approved the creation of multiple corpus funds for different purposes like CIRP costs, city maintenance expenses, and salary payments. - The applicant faced difficulties in operating the Corporate Debtor due to a shortage of funds resulting from delayed contributions from CoC members. 5. Issue: Tribunal's direction for pending contributions. - The Tribunal directed the respondents to make payments towards their pending contributions to the corpus fund within 15 days. - The order aimed to enable the applicant to operate the business of the Corporate Debtor as a going concern, preserve assets, and meet expenses during the CIRP. 6. Conclusion: The application was allowed and disposed of, emphasizing the urgency of funds for the Corporate Debtor's operations during the CIRP. The Tribunal's directive aimed to ensure timely contributions from the respondents to support the Corporate Debtor's financial stability and asset preservation.
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