2018 (9) TMI 1971 - Tri - Insolvency and Bankruptcy

Tribunal Approves Resolution Plan, Share Capital Restructuring, & Creditor Settlement under IBC 2016

The Tribunal approved the resolution plan submitted by Mr. Sarang S. Kale, recommended by the Committee of Creditors. The Memorandum of Association and ... Approval of Resolution plan - HELD THAT:- It is observed that as per the Resolution Plan, the board approves the restructuring of share capital can be carried out without being subject to the shareholders special resolution or the board resolution of the existing board for appointing the nominee(s) of the Board of Directors of the Resolution Applicant. The resolution plan submitted by the Resolution Applicant, Mr. Sarang S. Kale which was recommended by the COC vide meeting dated 18.06.2018 stands approved - The Resolution applicants are directed to adhere to the provisions of Section 53 of the IBC 2016 duly following the procedure for 'water fall' in relation to the amounts brought in by the Resolution Applicants. The Resolution Plan stands approved and the Resolution Process is to be concluded as per the terms of approved resolution plan with the modification made in para 10 of this Tribunal's order - Moratorium ceased to have effect. Issues:1. Approval of resolution plan submitted by Mr. Sarang S. Kale.2. Amendment of Memorandum of Association and Articles of Association.3. Declaration of the cessation of moratorium order.4. Other orders for the implementation of the resolution plan.5. Detailed components and restructuring proposed in the resolution plan.6. Shareholding restructuring post-investment by the Resolution Applicant.7. Treatment of disputed creditors and statutory dues.8. Approval of restructuring of share capital without shareholder approval.9. Addressing previous observations regarding financial credibility and tie-ups.10. Adherence to Section 53 of the IBC 2016 and cessation of moratorium.11. Forwarding of records to IBBI and conclusion of the resolution process.Detailed Analysis:1. The Tribunal approved the resolution plan submitted by Mr. Sarang S. Kale, which was recommended by the Committee of Creditors (COC) on 18.06.2018.2. The Tribunal was requested to approve the amendment of the Memorandum of Association and Articles of Association as proposed in the resolution plan.3. Upon approval of the resolution plan, the Tribunal declared the cessation of the moratorium order passed under Section 14 of the Code.4. Various prayers were made for other orders necessary for the implementation of the resolution plan.5. The resolution plan involved an initial investment of &8377;45 crores towards resolution costs, creditor repayments, and operational expenses without proposing any creditor loss.6. Post-investment, the Resolution Applicant and nominee(s) would acquire 100% equity share capital, converting existing equity into redeemable preference shares.7. Disputed creditors' amounts were to be paid based on legal proceedings outcomes, while statutory dues were to be settled in a staggered manner.8. The resolution plan allowed restructuring of share capital without shareholder approval.9. Previous observations regarding financial credibility and tie-ups were addressed and clarified by the Resolution Applicant.10. Adherence to Section 53 of the IBC 2016 and cessation of moratorium were directed, with records to be forwarded to IBBI.11. The resolution plan was approved, and the resolution process was to be concluded as per the approved plan with specified modifications.