Tribunal Approves Liquidation for Corporate Guarantors: Resolution Professional Appointed as Liquidator

The Tribunal approved the liquidation process for the Corporate Guarantors due to their lack of viable assets. The Resolution Professional was appointed as the Liquidator, with powers transferred from the Board of Directors. The Liquidator was tasked with recovering assets, coordinating with authorities, and seeking Tribunal directions. The Liquidator's fees were based on asset value, and legal proceedings against the Corporate Guarantor were restricted. The order served as a discharge notice to employees, and a similar application was allowed for another Corporate Guarantor. The moratorium ceased, and the order was to be uploaded on the Official Website and distributed to relevant parties.

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Issues:
Liquidation process initiation for Corporate Guarantors under the Insolvency & Bankruptcy Code, 2016.

Detailed Analysis:
1. Background and Application Filing:
- The Resolution Professional filed applications under Section 33(1), 33(2) & 34 of the Insolvency & Bankruptcy Code, 2016 for the initiation of the liquidation process of the Corporate Guarantors and Corporate Debtor.
- Corporate Guarantors were admitted into Corporate Insolvency Resolution Process (CIRP) by the Adjudicating Authority.
- Committee of Creditors (CoC) meetings were held, and resolutions were passed for liquidation due to the lack of viable financial and tangible assets.

2. Judicial Consideration:
- The Tribunal considered the submissions and material on record and determined that liquidation was appropriate due to insignificant assets of the Corporate Guarantor.
- Resolutions were passed by CoC in accordance with CIRP and Liquidation Process Regulations.
- The Tribunal approved the appointment of the Resolution Professional as the Liquidator for the Corporate Guarantor.

3. Order of Liquidation:
- The Tribunal issued an order appointing the Resolution Professional as the Liquidator of the Corporate Guarantor.
- All powers of the Board of Directors and key managerial persons ceased to exist, transferring to the Liquidator.
- The Liquidator was directed to recover trade receivables and other credits, coordinate with authorities, and seek necessary directions from the Tribunal during the process.

4. Operational Instructions:
- The Liquidator's fees were determined based on the value of the liquidation estate assets.
- Legal proceedings against the Corporate Guarantor were restricted, with exceptions for actions by the Liquidator with prior approval.
- The liquidation order served as a discharge notice to officers, employees, and workmen of the Corporate Guarantor.

5. Miscellaneous Directions:
- Moratorium declared earlier ceased to exist.
- The Registry was instructed to upload the order on the Official Website and send copies to relevant parties.
- Another identical application was allowed for the initiation of the liquidation process for another Corporate Guarantor of the Corporate Debtor.

This detailed analysis encapsulates the legal judgment's essence, highlighting the key aspects and decisions made by the Tribunal regarding the liquidation process initiation for the Corporate Guarantors under the Insolvency & Bankruptcy Code, 2016.

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