2022 (3) TMI 276 - Tri - Insolvency and Bankruptcy

Seeking direction/order for extension of liquidation process of the Corporate Debtor - Seeking extension of the liquidation period by six months for the final fulfillment of its legal requirement of the assignment pending as liquidation process, due to which the applicant is not able to dissolve the Corporate Debtor as per the provisions of IBC, 2016 IBBI (Liquidation Process) Regulations, 2016 - HELD THAT - This bench, after taking into consideration the facts and circumstances of the present case, grants an extension of 6 months to the timeline of liquidation proceedings of the Corporate Debtor from the date of passing of this order and further directs the stakeholders to pay fee to the liquidator as prescribed in regulation 4 of the Liquidation process. Application disposed off.

Summary

Issues:
Extension of liquidation process period, Distribution of unsold assets among stakeholders, Payment of fees to the liquidator

Extension of Liquidation Process Period:
The application sought an extension of the liquidation process of the Corporate Debtor by six months due to challenges in finding a buyer for unsold assets caused by lockdown and difficulties in attracting investors for auction. The liquidator conducted e-auctions and private sales but faced obstacles due to high maintenance charges, lack of proper title documents, and lack of buyer interest. The Tribunal granted the extension based on the peculiar nature of the unsold asset and special circumstances, allowing the liquidator to distribute the unsold assets among stakeholders as per the Code's priority order.

Distribution of Unsold Assets Among Stakeholders:
The applicant requested permission under Regulation 38(1) of the IBBI Liquidation Regulation, 2016 to distribute the unsold assets due to the asset's unique nature and special circumstances. The Stakeholders Consultation Committee discussed the situation, concluding that the unsold assets could only be distributed among stakeholders according to the priority order in the Code. The Tribunal approved the distribution of unsold assets among stakeholders and directed stakeholders to pay fees to the liquidator as per Regulation 4 of the Liquidation process.

Payment of Fees to the Liquidator:
The liquidator had received fees from selling other assets of the Corporate Debtor but sought payment from stakeholders for the unsold asset distribution. The liquidator was entitled to a fee as a percentage of the amount realized and distributed, as per Regulation 4 of the Liquidation Regulation. The Tribunal directed stakeholders to pay the liquidator's fees as prescribed in Regulation 4, allowing the liquidator to receive fees based on the realization and distribution of unsold assets. The Tribunal allowed the relevant prayers in the application and disposed of the matter accordingly, granting a six-month extension to the liquidation process period.