ROLE OF ADJUDICATING AUTHORITY IN APPROVING/ REJECTING A RESOLUTION PLAN

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By Richa Saraf and Ananya Raghavendra (resolution@vinodkothari.com)

The insolvency resolution process of Binani Cements have been through various ups- and downs. On 19.11.2018, the Hon’ble Supreme Court in the case of Rajputana Properties Pvt. Ltd. v. UltraTech Cement Ltd. & Ors. dismissed Dalmia Bharat’s plea to seek stay on Ultratech’s bid for Binani Cement, upholding the UltraTech Cement’s bid for Binani Cement sale. Previously, on 14.11.2018, the NCLAT had also held UltraTech’s offer for Binani Cement as valid, stating that Dalmia Bharat’s offer was discriminatory against some creditors[1]. Read more →

CONCEPT OF RELATED PARTY: INTERPRETATION BY LETTER OR SPIRIT OF IBC?

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LIQUIDATION PROCESS (SECOND AMENDMENT) REGULATIONS

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– Richa Saraf and Devisha Dhanuka (resolution@vinodkothari.com)

Pursuant to Notification No. IBBI/2017-18/GN/REG028, dated 27.03.2018, the very first amendment was brought into Regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 w.e.f. 01.04.2018 to permit sale of the corporate debtor as a going concern. The insertion, as aforementioned, was brought in force keeping in view the object with which the Insolvency and Bankruptcy Code, 2016 (“Code”) was formulated, i.e. to provide for an opportunity of revival of the entity under distress.

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PRIORITY OF TAX DUES IN LIQUIDATION?

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By Kasturi Chowdhury (resolution@vinodkothari.com)

 

The manner of distribution of the assets of a company during liquidation is fraught with ambiguity and settlement of such claims arising out of it has inconvenienced the parties concerned since the advent of the Insolvency and Bankruptcy Code, 2016 (“Code”).  In a recent ruling, the judgement of the Hon’ble High Court of Hyderabad showed the path to be followed when there arose such conflict regarding priority of settling the dues of the Income Tax authority during liquidation of a Company. Read more →

Moratorium during Liquidation: Scope And Effect

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By Richa Saraf (resolution@vinodkothari.com)

What is a moratorium?

The term has been defined in Merriam Webster Dictionary to mean “legally authorized period of delay in the performance of a legal obligation or the payment of a debt; a waiting period set by an authority; or a suspension of activity. Read more →

Reversibility of Liquidation Order?

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By Richa Saraf (resolution@vinodkothari.com)

Insolvency and Bankruptcy Code was framed with the object to provide opportunity for revival to an insolvent company, however, since the rising number of liquidation cases, as against resolution, is a cause of worry.

“After more than a year of the Insolvency and Bankruptcy Code proceedings, there have been more liquidation cases than resolution of the non-performing assets accounts. According to a data from the Insolvency and Bankruptcy Board of India, in the National Company Law Tribunal, around 78 companies got liquidation orders since February 2017[1].”- quoted in an article in Business Standard.

“An analysis of companies that have completed the Corporate Insolvency Resolution Process (CIRP) till December reveals that liquidation orders were passed for as many as 30 companies. This is three times the number of 10 cases for which resolution was approved at the culmination of the CIRP, as per latest data available with the Insolvency and Bankruptcy Board of India.[2] – quoted in an article in Indian Express. Read more →