Conditionality of the Letter of Intent (LoI) issued by the ...

Successful Resolution Applicant's objections to the conditional Letter of Intent rejected by the court.

Case Laws     IBC

November 5, 2024

Conditionality of the Letter of Intent (LoI) issued by the Resolution Professional (RP) with the approval of the Committee of Creditors (CoC), and whether it was in conformity with the resolution plan and addendum submitted by the Successful Resolution Applicant (SRA). The court held that the SRA was aware of the conditions mentioned in the LoI, which were discussed and deliberated in the CoC meetings, and were integral to the resolution plan. The SRA's objections to the conditional LoI were deemed an afterthought, as the SRA had requested the CoC to issue the LoI without raising any objections earlier. The court emphasized the paramount importance of the commercial wisdom of the CoC, which is not subject to judicial review, except for ensuring compliance with the IBC and related regulations. The court found no infirmity in the Adjudicating Authority's decision to approve the liquidation of the Corporate Debtor, given the expiry of the CIRP timeline and the SRA's deliberate procrastination in accepting the resolution plan. The appeals were dismissed as devoid of merit.

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