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of <h1>Tribunal approves detailed financial plan for Corporate Debtor, binding on all parties</h1> The Tribunal approved the Resolution Plan of M/s. Sponge Sales India Private Limited for the Corporate Debtor, as proposed by the Resolution Professional ... Approval of resolution plan - Section 30(6), Section 31, Section 60(5) of the Insolvency and Bankruptcy Code, 2016 along with Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- All the provisions of mandatory requirements are seen complied by the resolution applicant as per From H submitted by the RP. It provides provision for the payment of insolvency resolution process, payment of the debts of operational creditors, management of the affairs of the Corporate Debtor, and provides provision for implementation and supervision of the resolution plan. It also provides terms of the plan and its implementation schedule. So it is a feasible and viable plan. A judicious distribution of the financial bids by the CoC to the stakeholders according to their entitlements can be inferred from the plan under consideration. No waiver or extinguishments in contravention of the provisions of the Code or in violation of existing laws seen not brought out and therefore, there is nothing in the plan, so as to disapprove it. The CoC has very well deliberated with the two plans and decided the viability, feasibility and financial matrix of each plan and approved one with 100% vote shares of the members of the CoC. Resolution plan is approved - application allowed. Issues: Approval of resolution plan under the Insolvency and Bankruptcy Code, 2016Issue 1: Approval of Resolution PlanThe 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 HistoryThe 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 ComplianceThe 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 ImplementationAfter 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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