Corporate guarantor liquidation may proceed when creditors validly resolve it and no realistic resolution prospect exists.

Where the committee of creditors lawfully resolves to liquidate a corporate guarantor and the record shows insignificant assets with no realistic prospect of resolution, the Insolvency and Bankruptcy Code permits liquidation and appointment of the resolution professional as liquidator. The note emphasizes that the statutory framework and applicable regulations support this course when the creditor body acts with the requisite voting share and the debtor has no viable resolution possibility.

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Issues: Whether liquidation of the corporate guarantor was to be initiated and the Resolution Professional appointed as liquidator.

Analysis: The CoC had resolved by the requisite voting share to seek liquidation, and the materials on record showed that the corporate guarantor had insignificant financial and tangible assets with no realistic prospect of resolution. The decision to proceed with liquidation was supported by the CoC resolutions and the statutory framework governing liquidation and appointment of the liquidator under the Code and the applicable regulations.

Conclusion: Liquidation was ordered and the Resolution Professional was appointed as liquidator.

Ratio Decidendi: Where the CoC lawfully resolves for liquidation and the corporate guarantor has no viable assets or realistic resolution possibility, the Tribunal may order liquidation and appoint the Resolution Professional as liquidator in terms of the Code.

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