Tribunal Approves Resolution Plan under Insolvency Code, Making it Binding on Debtor and Stakeholders

The Tribunal approved the Resolution Plan under Section 30(6) of the Insolvency & Bankruptcy Code, 2016, making it binding on the Corporate Debtor and stakeholders. The Resolution Applicant, M/s. Euro Pratik Ispat (India) Private Limited, emerged as the highest bidder with a financial bid of Rs. 3.01 Crore, which was accepted by the Committee of Creditors. The Plan included financial and operational restructuring, payment structures for creditors, and various reliefs sought by the Resolution Applicant. Compliance with statutory obligations was mandated within one year, with non-compliance leading to forfeiture of the Earnest Money Deposit.

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Issues Involved:
1. Approval of Resolution Plan under Section 30(6) of the Insolvency & Bankruptcy Code, 2016.
2. Appointment and actions of the Interim Resolution Professional (IRP) and Resolution Professional (RP).
3. Process and decisions of the Committee of Creditors (CoC) meetings.
4. Evaluation and selection of Resolution Plans.
5. Implementation and monitoring of the Resolution Plan.
6. Financial and operational restructuring of the Corporate Debtor.
7. Payment to creditors and cost of the Corporate Insolvency Resolution Process (CIRP).
8. Reliefs, concessions, and entitlements sought by the Resolution Applicant.
9. Compliance with statutory obligations and sanctions from governmental authorities.

Detailed Analysis:

1. Approval of Resolution Plan:
An application was moved by the Resolution Professional invoking Section 30(6) of the Insolvency & Bankruptcy Code, 2016, for approval of a Resolution Plan. The Tribunal passed an order as prescribed under Section 31(1) of the Code.

2. Appointment and Actions of IRP and RP:
The Financial Creditor filed a petition against the Corporate Debtor under Section 7 of the Code. The petition was admitted, and Mr. Santanu T. Ray was appointed as the IRP, later confirmed as the RP in the first CoC meeting. Actions taken by the RP included arranging factory visits, preparing the Information Memorandum, and appointing a Forensic Auditor.

3. Process and Decisions of CoC Meetings:
In the second CoC meeting, resolutions were passed for eligibility criteria, bid evaluation matrix, and the invitation for Expression of Interest (EoI). The RP published the EoI in newspapers, and the third CoC meeting extended the submission date for Resolution Plans. In subsequent meetings, Resolution Plans were evaluated, and the highest bidder was selected.

4. Evaluation and Selection of Resolution Plans:
The RP received EoIs from five Prospective Resolution Applicants. After evaluation, M/s. Euro Pratik Ispat (India) Private Limited emerged as the highest bidder with a financial bid of Rs. 3.01 Crore, accepted by the CoC subject to certain modifications.

5. Implementation and Monitoring of the Resolution Plan:
The RP appointed valuers to determine the Fair Value and Liquidation Value of the Corporate Debtor. The modified Resolution Plan was submitted and approved by the CoC with a 100% voting share. The Resolution Plan included the infusion of Rs. 3.10 Crore by the Resolution Applicant.

6. Financial and Operational Restructuring:
The Resolution Plan proposed to acquire 100% ownership and management of the Corporate Debtor as a "Going Concern." The total financial cost for the Resolution Applicant was Rs. 3.01 Crore, with payments to Financial Creditors and no payments to Operational Creditors or employees due to lack of claims.

7. Payment to Creditors and Cost of CIRP:
The CIRP costs estimated at Rs. 35,00,000 were to be paid in full and in priority. The Resolution Plan outlined the payment structure for Financial Creditors, including upfront and deferred payments.

8. Reliefs, Concessions, and Entitlements:
The Resolution Applicant sought various reliefs, including continuation of licenses, consents, and approvals, treatment of ongoing litigation, and exemptions from taxes and stamp duty. The Tribunal directed compliance with statutory obligations within one year and approved the Resolution Plan, making it binding on all stakeholders.

9. Compliance with Statutory Obligations:
The Tribunal directed the Resolution Applicant to comply with statutory obligations within one year as per Section 31(4) of the Code. In case of non-compliance or withdrawal of the Resolution Plan, the CoC was entitled to forfeit the EMD amount.

Conclusion:
The Tribunal approved the Resolution Plan, making it binding on the Corporate Debtor and other stakeholders. The "Moratorium" under Section 14 ceased to have any effect, and the RP was directed to hand over all records and premises to the Resolution Applicant. The Resolution Applicant was granted access to finalize actions required for starting operations, and the directions were effective from the date of the order.

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