Approval of Resolution Plan under Insolvency Code secures debt repayment & Corporate Debtor's future The Resolution Plan seeking approval under the Insolvency and Bankruptcy Code, 2016 was approved by the Tribunal. The plan, compliant with relevant ...
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Approval of Resolution Plan under Insolvency Code secures debt repayment & Corporate Debtor's future
The Resolution Plan seeking approval under the Insolvency and Bankruptcy Code, 2016 was approved by the Tribunal. The plan, compliant with relevant sections and regulations, provided for the payment of costs, debt repayment, management of the Corporate Debtor, and distribution of dues. It aimed to continue the Corporate Debtor as a going concern with existing management. With unanimous approval from the Committee of Creditors and compliance with legal requirements, the plan was declared binding on stakeholders. The moratorium order ceased, and the plan was to be implemented in accordance with the Code and regulations.
Issues: Approval of Resolution Plan under the Insolvency and Bankruptcy Code, 2016.
Analysis: The application filed by the Resolution Professional sought approval of the Resolution Plan under section 30(6) of the Insolvency and Bankruptcy Code, 2016, along with Regulation 39(4) of the Insolvency and Bankruptcy Board of India Regulations. The Resolution Plan was approved by the Committee of Creditors (CoC) and was in compliance with various sections and regulations of the Code.
One of the financial creditors had initiated Corporate Insolvency Resolution Process against the Corporate Debtor, leading to the appointment of an Interim Resolution Professional. The Resolution Professional managed the Corporate Insolvency Resolution Process under various sections of the IBC, and an extension of 90 days was granted beyond the initial 180-day period.
Claims were received from Financial Creditors, and the CoC was constituted with unrelated unsecured Financial Creditors. Prospective resolution applicants were invited, and three plans were received, out of which one plan was found satisfactory by the CoC. The Resolution Plan was examined and found consistent with the requirements of section 30(2) of the Code.
The approved Resolution Plan provided for the payment of insolvency resolution process costs, repayment of debts, management of the Corporate Debtor, and compliance with the law. The plan also covered the distribution of dues of claimants and CIRP costs as prescribed under section 53 of the IBC, 2016.
The Resolution Plan envisaged the continuation of the Corporate Debtor as a going concern, with the previous management running the company. Affidavits were obtained to confirm the eligibility of the Resolution Applicant under section 29A of the Code.
The Resolution Plan was unanimously approved by the CoC and was found compliant with the provisions of the Code and regulations. There were no objections from stakeholders, and the Adjudicating Authority approved the plan as it met the requirements of the Code.
The Resolution Plan was declared binding on the corporate debtor, members, employees, creditors, and other stakeholders. The moratorium order passed under section 14 of the Code ceased to have effect, and all records were to be forwarded to the IBBI for recording.
In conclusion, the Resolution Plan was approved by the Tribunal, and the necessary steps were taken to ensure its effective implementation and compliance with the Code and regulations.
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