Extension granted for Corporate Insolvency Resolution Process under Insolvency & Bankruptcy Code The Adjudicating Authority granted a 90-day extension for the Corporate Insolvency Resolution Process (CIRP) under the Insolvency & Bankruptcy Code, ...
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Extension granted for Corporate Insolvency Resolution Process under Insolvency & Bankruptcy Code
The Adjudicating Authority granted a 90-day extension for the Corporate Insolvency Resolution Process (CIRP) under the Insolvency & Bankruptcy Code, 2016, from August 27, 2020, to October 15, 2020, excluding the lockdown period. This extension was sought due to delays in essential processes and the impact of the COVID-19 pandemic on the Corporate Debtor's operations. The Committee of Creditors (COC) unanimously supported the resolution for the extension, ensuring the total CIRP period did not exceed 330 days, excluding the lockdown period.
Issues: Extension of time period for Corporate Insolvency Resolution Process (CIRP) under the Insolvency & Bankruptcy Code, 2016 due to lockdown period.
Analysis: The applicant filed an application under Section 12 of the Insolvency & Bankruptcy Code, 2016, seeking an extension of the CIRP period by 90 days excluding the lockdown period. The Corporate Insolvency Resolution Process was initiated for the Corporate Debtor, and the Interim Resolution Professional was appointed. Despite efforts to take control of the Corporate Debtor's affairs, non-cooperation from the directors hindered the process. An application was filed for directions to ensure cooperation. The Committee of Creditors (COC) sought an extension of the CIRP period due to delays in essential processes like publishing EOI and appointment of valuers. The COC directed the RP to publish EOI and requested an extension of the CIRP period from the Adjudicating Authority.
Subsequently, the COC resolved to seek a 90-day extension of the CIRP period, excluding the period of litigation in the High Court. An application was filed, and the Adjudicating Authority granted a 60-day extension. However, due to the lockdown imposed by the Central Government, further extensions were sought. The Insolvency and Bankruptcy Board of India introduced Regulation 40C, excluding the lockdown period for CIRP timelines. The EOI schedule was adjusted accordingly.
During a COC meeting, it was noted that no resolution plans were received within the specified timeline. The COC discussed the request for withdrawal of the application under section 12A of the Code, which was declined. The Corporate Debtor proposed to settle accounts with the financial creditor due to the impact of the COVID-19 pandemic, seeking an additional 90-day extension to revive operations. The COC directed the RP to file an application for a 90-day extension, ensuring the total CIRP period does not exceed 330 days, excluding the lockdown period.
Following an e-voting where the COC unanimously supported the resolution, the Adjudicating Authority granted a 90-day extension for the CIRP, considering the lockdown period. The extension was granted from August 27, 2020, to October 15, 2020, excluding the lockdown period.
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