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TMI Blog2019 (5) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... of the concessions and directions sought by the resolution applicant more fully set out in paragraph 11 of the application. 2. Initially, C. P. No. 689/(IB)/CB/2017 was filed under section 9 of the I and B Code, 2016 read with rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by Mr. Pradeep M. R. (in short, the "operational creditor") against M/s. Merchem Ltd. (in short, the "corporate debtor"). C. P. No. 689/(IB)/CB/2017 has been admitted on January 15, 2018, and CIR process was initiated against the corporate debtor, moratorium was declared and the interim resolution professional was appointed. 3. The interim resolution professional took over the management and affairs of the corporate debtor and caused public announcement on January 19, 2018 under regulation 6(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, for filing the claims by the creditors. After verification of the claims received, the interim resolution professional constituted committee of creditors (CoC). 4. In the second meeting of the CoC held on March 16, 2018, the CoC has unanimously decided to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution plan submitted by M/s. Acme Chem Ltd., was unanimously approved by the CoC in its meeting held on September 12, 2018 and the resolution passed by the CoC is extracted below :- "Resolved that, the resolution plan submitted by Acme Chem Ltd. for acquisition of Merchem Ltd. for a total consideration of Rs. 115.2520 crores be and is hereby approved since it is above the liquidation value and rating of the plan stood at '73' which is better than '52/54' in respect of Nitrex Chemical India Ltd. as per the Eva luation Matrix as approved by the CoC for the resolution process. Resolved further that, out of the total consideration, Acme Chem Ltd. will be paying Rs. 109.822 crores towards financial creditors, Rs. 3.78 crores towards CIRP expenses, Rs. 1.40 crores towards work men dues, Rs. 3.55 lakhs towards employee dues, Rs. 7 lakhs towards operational creditors dues, Rs. 12 lakhs towards statutory dues and Rs. 1.78 lakhs to the preference shareholders and Rs. 0.67 lakhs to the equity and preference shareholders for transferring/waiving all their rights of all the equity and preference shares in favour of Acme Chem Ltd. Resolved further that the resolution pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment Corporation from compliance with the conditions for drawal of water from prevailing source for a period of two years com mencing from the effective date. F. Approvals from Environment and Forest, Central Pollution Control board, State Pollution Control board, Water Authorities and other Government authorities for regularization and waiver of any non-compliances pertaining to environment, water and forests. G. The State Government to treat the re-commencement of oper ations of corporate debtor as 'commencement of operations as a new unit' and consequently on and from the date of such commencement, grant the corporate debtor the entire fiscal incentives as granted to other units in the area to be able to effectively compete with other units in the region. H. National Company Law Tribunal to recommend full support to be extended by the water, electricity and other relevant authorities for effective revival of the corporate debtor. I. Allow setting off of brought forward losses and unabsorbed depreciation for computation of taxable profits as permitted under section 79 of the Income-tax Act, 1961, for a period of eight years. J. Provide a reasonable opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution plan, and accordingly the resolution plan tendered herein is subject to and conditional upon the existing arrangement continuing peren nially. U. Exemption from levy of any duty, charges, fee or by whatso ever name called arising due to change in ownership structure of the corporate debtor. 8.2. All the amounts will be paid after proper reconciliation and without prejudice to legal remedies available to the corporate debtor. 8.3. All claims, rights of promoter/promoter group against the cor porate debtor, unless covered in the resolution plan, shall stand irre vocably and unconditionally extinguished. 8.4. All claims of government authorities, in relation of all taxes, liabilities, penalties, etc., for period pertaining prior to effective date shall stand fully extinguished. 8.5. All outstanding negotiable instruments issued by corporate debtor or any other person on behalf of corporate debtor shall stand terminated and no liability shall arise on the same. 8.6. All liabilities in relation of corporate guarantees, indemnities, etc., provided by the corporate debtor as on the effective date shall stand extinguished. 8.7. Any action, with regard to the assets/cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oC for its fresh consideration and was given two weeks time to clarify the issues raised by this Authority and the resolution professional was also directed to file sta tus report within two working days thereafter. 9. The resolution professional on January 4, 2019 has filed a supplementary affidavit to place on record certain subsequent developments in the case after the order passed by this Authority on December 13, 2018 and also filed that the CoC satisfied about the viability and feasibility of the reso- lution plan being approved and it has also satisfied about the resolution applicant, viz., Acme Chem Ltd., being able to implement the resolution plan, even if this Authority may not grant some specific concessions/ exemptions mentioned in them resolution plan. 10. It is further stated in supplementary affidavit that even if the owners of Grove Ltd. and Merchem India P. Ltd., do not renew/continue the office/ plant facilities to the corporate debtor, CoC has satisfied itself that such non-renewal/non-continuance of the agreements could affect Acme Chem's resolution plan to some extent but it would not make the resolution plan submitted by them unviable or infeasible by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs for transferring/waiving all their rights of all the equity and preference shares in favour of Acme Chem Ltd. Resolved further that the resolution professional is authorized to place the submission made by the successful resolution applicant as part of the resolution plan already submitted to the Adjudicating Authority, approach the Adjudicating Authority for seeking the approval of the resolution plan by making addendum/amendment to the application already made by RP or/and by following any other process as may be deemed fit. Resolved that all the secured financial creditors of Merchem Ltd., reserve their rights to exercise all options available under the law of the land to recover the balance dues from Merchem Ltd. from the personal/corporate guarantees/collateral provided by the existing pro moter director/directors/relatives of directors/associates of Merchem Ltd. All CoC members voted in favour of the above resolution, 3 CoC members having voting power of 92.4 per cent. were physically pre sent and voted in the meeting and the remaining member-Axis Bank having a voting share of 7.6 per cent. voted via e-voting in favour of the resolutions." 14. The CoC has considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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