Tribunal approves detailed financial plan for Corporate Debtor, binding on all parties

The Tribunal approved the Resolution Plan of M/s. Sponge Sales India Private Limited for the Corporate Debtor, as proposed by the Resolution Professional and approved by the Committee of Creditors with 100% voting shares. The plan outlined a detailed financial proposal ensuring payments to creditors and employees, and the Tribunal found it feasible and viable. The Resolution Plan was deemed binding on all relevant parties, the moratorium order was lifted, and the case was disposed of without costs, with necessary communications and certified copies of the order to be provided to concerned parties.

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Issues: Approval of resolution plan under the Insolvency and Bankruptcy Code, 2016

Issue 1: Approval of Resolution Plan
The case involves an application by the Resolution Professional (RP) for the approval of a resolution plan for a Corporate Debtor under various sections of the Insolvency and Bankruptcy Code, 2016. The Resolution Plan of M/s. Sponge Sales India Private Limited was approved by the Committee of Creditors (CoC) with 100% voting shares. The RP sought urgent hearing due to disruptions caused by the Covid-19 pandemic, and the matter was listed for a video conference hearing.

Issue 2: Background and Procedural History
The Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was initiated, and the CoC held multiple meetings to evaluate Resolution Plans. The RP received several Expressions of Interest (EOIs) and ultimately received two Resolution Plans. After detailed discussions and modifications, the CoC declared the H1 and H2 Resolution Applicants. The Resolution Plan of M/s. Sponge Sales (India) Private Limited was approved by the CoC with 100% voting shares.

Issue 3: Financial Proposal and Compliance
The Resolution Plan included a detailed financial proposal outlining the payment structure for various creditors. The RP submitted necessary certificates and affidavits to comply with regulations. The plan addressed the interests of stakeholders, prioritized payments to Operational Creditors, and demonstrated feasibility and viability. The Resolution Applicant offered a higher amount than the liquidation value approved by the CoC, ensuring payments to creditors and employees.

Issue 4: Approval and Implementation
After reviewing the Resolution Plan and considering the RP's submissions, the Tribunal found the plan to be feasible and viable. The RP was commended for finding a suitable Resolution Applicant, especially during the challenging times of the pandemic. The Tribunal approved the Resolution Plan of M/s. Sponge Sales (India) Private Limited, making it binding on all relevant parties. The moratorium order under Section 14 was lifted, and the Resolution Professional was directed to forward all records to the Insolvency and Bankruptcy Board of India. The case was disposed of without costs, and necessary communications and certified copies of the order were to be provided to the concerned parties.

This detailed analysis covers the approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016, highlighting the procedural history, financial aspects, compliance with regulations, and the final approval and implementation by the Tribunal.

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