2019 (8) TMI 1742 - Tri - Insolvency and Bankruptcy

Shareholder & Creditor Meetings: Directions for Corporate Debtor Restructuring

The National Company Law Tribunal, Chennai Bench, issued directions for convening meetings of shareholders and creditors for the restructuring of a ... Scheme for restructuring of the Corporate Debtor - seeking directions for convening the meeting of the Shareholders and Creditors - Section 230 of the Companies Act, 2013 - HELD THAT:- It is on record that the Scheme has been filed on 06.06.2019 and thereafter the amended Scheme was filed on 01.08.2019. The Promoter(s) has revised the proposal for the settlement and restructuring of the Company as provided in the Scheme. Directions regarding holding, convening and dispensation of various meetings issued - directions regarding issuance of notices also issued. The scheme is approved - application allowed. Issues Involved:1. Directions for convening meetings of shareholders and creditors for restructuring under Section 230 of the Companies Act, 2013.Analysis:The judgment pertains to an application filed seeking directions for convening meetings of shareholders and creditors for the purpose of restructuring a Corporate Debtor. The National Company Law Tribunal, Chennai Bench, considered an order passed by the Hon'ble NCLAT in Company Appeal (AT) (Insolvency) No. 696/2018, which directed the Liquidator to work out a Scheme under Section 230 of the Companies Act, 2013 for the restructuring of the Company. The Liquidator filed an application to seek directions for convening meetings of the Shareholders and Creditors. It is noted that the Scheme was initially filed on 06.06.2019 and an amended Scheme was filed on 01.08.2019 by the Promoter(s) for settlement and restructuring purposes.The judgment specifies the procedure for convening meetings of Equity Shareholders and Creditors. The Liquidator is directed to convene the meeting of Equity Shareholders on a specified date and time, with a fixed quorum requirement. In case of insufficient quorum, the meeting can be adjourned, and those present shall constitute the quorum for passing resolutions related to the Scheme. Similar provisions are made for convening the meeting of Creditors, with specific requirements for quorum and notice issuance. The Liquidator is tasked with ensuring fair proceedings during the meetings and submitting a report to the Bench post the meetings.Furthermore, the judgment outlines the responsibilities of the Liquidator in terms of publication of notices in English and vernacular languages, as well as issuing notices to relevant authorities such as RoCs, RDs, and the Income Tax Department. The Liquidator is empowered to cause the publication of notices and provide necessary details to the Registry for issuing notices to concerned authorities. Additionally, the Promoter(s) submitting the Scheme are directed to arrange for meeting expenses, which must be provided to the Liquidator promptly.The judgment also clarifies that the Liquidator retains the right to vote as the Chairman of the meetings, with a casting vote, and the Scheme should account for the cost of Liquidation/approval. Inspection of equipment for job purposes is allowed, and the Liquidator is instructed to file the approved Scheme within a specified timeframe post the meetings. Ultimately, the application is disposed of in accordance with the directives outlined in the judgment.