Extension granted for Corporate Insolvency Resolution Process () to preserve going concern status and ensure continuity. The Tribunal granted a 90-day extension for the Corporate Insolvency Resolution Process (CIRP) of a Corporate Debtor, following a unanimous resolution by ...
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Extension granted for Corporate Insolvency Resolution Process () to preserve going concern status and ensure continuity.
The Tribunal granted a 90-day extension for the Corporate Insolvency Resolution Process (CIRP) of a Corporate Debtor, following a unanimous resolution by the Committee of Creditors. This decision was based on the Supreme Court's directive to maintain the company as a going concern, emphasizing the need to ensure continuity during the insolvency resolution process.
Issues: Extension of time for Corporate Insolvency Resolution Process.
Analysis: The judgment pertains to an application seeking an extension of time for the Corporate Insolvency Resolution Process (CIRP) of a Corporate Debtor under the Insolvency and Bankruptcy Code, 2016. The application was filed under sections 12(2) & (3) of the Code and Regulation 40 of IBBI (Insolvency Resolution Process of Corporate Persons) Regulations, 2016. The Applicant/RP requested a further 90-day extension as the initial period was set to expire on 12.01.2020. It was highlighted that the Director of the Corporate Debtor had previously appealed the initiation of the CIR Process, leading to legal proceedings in the NCLAT and subsequently in the Supreme Court of India. The Supreme Court's order on 25.10.2019 directed the Resolution Professional (RP) to draw necessary amounts from the frozen account to ensure the company's continuity as a going concern.
The Committee of Creditors (CoC) met on 24.12.2019 and unanimously passed a resolution on 07.01.2020, approving the extension of time for the CIRP. Considering the Supreme Court's directive to maintain the company as a going concern, the Tribunal granted the extension of the CIRP by a further 90 days from 13.01.2020. The application for extension of time was allowed based on the representations made by the Applicant/RP and the legal directives from the Supreme Court. The judgment emphasizes the importance of ensuring the continuity of the Corporate Debtor as a going concern during the insolvency resolution process.
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