Extension granted for Corporate Debtor liquidation process due to asset sale challenges. Distribution among stakeholders approved.

The Tribunal granted a six-month extension to the liquidation process of the Corporate Debtor due to challenges in finding buyers for unsold assets. The liquidator faced obstacles in selling assets and was permitted to distribute unsold assets among stakeholders based on the priority order in the Code. Stakeholders were directed to pay fees to the liquidator as per regulations, allowing the liquidator to receive fees from the distribution of unsold assets. The Tribunal approved the distribution of assets among stakeholders and granted the requested extension to the liquidation process period.

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Issues:
Extension of liquidation process period, Distribution of unsold assets among stakeholders, Payment of fees to the liquidator

Extension of Liquidation Process Period:
The application sought an extension of the liquidation process of the Corporate Debtor by six months due to challenges in finding a buyer for unsold assets caused by lockdown and difficulties in attracting investors for auction. The liquidator conducted e-auctions and private sales but faced obstacles due to high maintenance charges, lack of proper title documents, and lack of buyer interest. The Tribunal granted the extension based on the peculiar nature of the unsold asset and special circumstances, allowing the liquidator to distribute the unsold assets among stakeholders as per the Code's priority order.

Distribution of Unsold Assets Among Stakeholders:
The applicant requested permission under Regulation 38(1) of the IBBI Liquidation Regulation, 2016 to distribute the unsold assets due to the asset's unique nature and special circumstances. The Stakeholders Consultation Committee discussed the situation, concluding that the unsold assets could only be distributed among stakeholders according to the priority order in the Code. The Tribunal approved the distribution of unsold assets among stakeholders and directed stakeholders to pay fees to the liquidator as per Regulation 4 of the Liquidation process.

Payment of Fees to the Liquidator:
The liquidator had received fees from selling other assets of the Corporate Debtor but sought payment from stakeholders for the unsold asset distribution. The liquidator was entitled to a fee as a percentage of the amount realized and distributed, as per Regulation 4 of the Liquidation Regulation. The Tribunal directed stakeholders to pay the liquidator's fees as prescribed in Regulation 4, allowing the liquidator to receive fees based on the realization and distribution of unsold assets. The Tribunal allowed the relevant prayers in the application and disposed of the matter accordingly, granting a six-month extension to the liquidation process period.

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