Tribunal Orders Liquidation of Corporate Debtor post CIRP due to Lack of Viable Plan

The Tribunal ordered the liquidation of the corporate debtor after the expiration of the Corporate Insolvency Resolution Process (CIRP) period, as no viable resolution plan was received within the specified timelines. The CoC unanimously approved the liquidation process, and the Tribunal appointed the Resolution Professional as the Liquidator. The fair value of assets and liquidation value were assessed, and the liquidation process was directed to commence in accordance with the Insolvency and Bankruptcy Code and relevant regulations. The Liquidator was instructed to submit a Preliminary Report within the specified timeline, concluding the matter with the disposal of the application.

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Issues:
Liquidation order under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 for a corporate debtor.

Analysis:
1. The Resolution Professional filed an application for the liquidation of the corporate debtor under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, due to the non-receipt of any resolution plan within the stipulated time frame.

2. The Corporate Insolvency Resolution Process (CIRP) commenced with the admission of the application by the Adjudicating Authority and the appointment of an Interim Resolution Professional. Despite efforts to invite expression of interest from prospective Resolution Applicants, no viable resolution plan was received within the specified timelines.

3. The Resolution Professional sought an extension of the CIRP period by another 90 days, which was approved by the CoC due to the absence of any resolution plan. Subsequent attempts to attract Resolution Applicants through publications also failed to yield any positive response.

4. Following the expiration of the CIRP period and the non-receipt of any resolution plan, the CoC unanimously passed a resolution to initiate the liquidation process of the corporate debtor with 100% of votes.

5. The Tribunal, considering the provisions of the law and the facts of the case, ordered the liquidation of the corporate debtor. The fair value of assets and liquidation value were duly assessed by a registered valuer, and the liquidation process was directed to commence as per the Insolvency and Bankruptcy Code and relevant regulations.

6. The Tribunal appointed the Resolution Professional as the Liquidator and issued directions for the necessary public announcements, communications to regulatory authorities, cessation of the moratorium, and initiation of the liquidation process in compliance with the applicable laws and regulations.

7. The Liquidator was mandated to submit a Preliminary Report to the Adjudicating Authority within the specified timeline, and the order was deemed a notice of discharge to the officers, employees, and workmen of the corporate debtor as per the Insolvency and Bankruptcy Code.

8. The Tribunal directed the issuance of copies of the order to the operational creditor, corporate debtor, and the Liquidator for further actions, effectively concluding the matter with the disposal of the filed application.

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