Corporate Debtor Liquidation Order Issued Under IBC Section 33(1)(b)

The Adjudicating Authority ordered the liquidation of the Corporate Debtor under Section 33(1)(b) of the Insolvency and Bankruptcy Code after the Committee of Creditors approved the resolution for liquidation due to the absence of viable resolution plans within the specified timeline. Additionally, a fresh valuation of the assets was conducted to determine their current market value, leading to discussions within the CoC. The Resolution Professional was appointed as the Liquidator for the Corporate Debtor to oversee the liquidation process in accordance with the IBC.

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Issues: Liquidation of Corporate Debtor, Fresh Valuation of Assets, Appointment of Liquidator

Liquidation of Corporate Debtor:
The application was filed under Section 33(1)(a) of the Insolvency and Bankruptcy Code seeking the liquidation of the Corporate Debtor Company. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and despite efforts to revive the company, including the submission and consideration of resolution plans, the Committee of Creditors (CoC) ultimately decided to liquidate the company. The CoC, with a 95.29% majority, approved the resolution for liquidation as no viable resolution plan was received within the stipulated timeline. The Adjudicating Authority, considering the prolonged CIRP period and the commercial wisdom of the CoC, ordered the Corporate Debtor to go into liquidation under Section 33(1)(b) of the IBC.

Fresh Valuation of Assets:
A proposal was made to conduct a fresh valuation of the assets of the Corporate Debtor to determine their current market value due to economic slowdown and adverse market conditions. The CoC was urged to consider the importance of updated asset valuation for making informed decisions regarding the resolution process. The Adjudicating Authority directed the CoC to conduct a fresh valuation, which was subsequently carried out by registered valuers. The valuation report indicated the liquidation value of the assets on a going concern basis and piecemeal basis, leading to further discussions within the CoC.

Appointment of Liquidator:
Following the decision to proceed with the valuation and in light of the extended CIRP period, the CoC directed the Liquidator to file an application before the Adjudicating Authority. The Adjudicating Authority, after reviewing the circumstances and powers under Section 33(1) of the IBC, ordered the appointment of the Resolution Professional as the Liquidator for the Corporate Debtor. The Liquidator was tasked with sending notifications to relevant authorities, making public announcements, and adhering to the provisions of the IBC while filing progress reports periodically.

This comprehensive analysis highlights the key aspects of the judgment, including the liquidation process, asset valuation considerations, and the appointment of the Liquidator, as decided by the Adjudicating Authority in response to the application filed under the Insolvency and Bankruptcy Code.

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