TaxTMI 
TaxTMI 
2018 (7) TMI 2263
X X X X Extracts X X X X
X X X X Extracts X X X X
....(1) of the Code with the reliefs as mentioned below: a. Approve the Final Resolution Plan in terms of Section 31(1) of the code. b. Order that the approval of the Final Resolution Plan shall not extinguish the rights of members of the CoC and the liability of existing promoters of the company under the personal guarantees/sureties/indemnities executed by the existing promoters in favour of the members of CoC and that any subrogation or other rights that the existing promoters of the Corporate Debtor may have against the Corporate Debtor and/or the transferee of assets of the Corporate Debtor shall stand automatically waived and extinguished in full; c. This Hon'ble Tribunal be pleased to pass an order for exemption from payment of any stamp duty in respect of the actions proposed to be undertaken in accordance with the Final Resolution Plan; d. In the alternative to prayer clause (c), this Hon'ble Tribunal be pleased to declare that the order of the Hon'ble Tribunal approving the Final Resolution Plan shall be deemed to be an order of the Hon'ble Tribunal sanctioning a reconstruction and amalgamation of companies under the Compani....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncement published in Form A in Business Standard (Hindi), Raipur edition newspapers ("Public Announcements") to invite proof of claims from Public announcement published in Form A Business Standard (both English and Hindi) Delhi edition, The Pioneer (English), Raipur edition, the creditors of the Corporate Debtor. The Public Announcement was also published on the website of the Corporate Debtor. As per regulation 6(1) of the CIRP Regulations, an insolvency professional is required to make a public not later than 3 (three) days from the date announcement As per regulation 6(1) of the CIRP Regulations, an insolvency professional is required to make a of his appointment an as interim resolution The order appointing the professional. Applicant as interim resolution professional was communicated to him on July 24, 2017. Status: Compliant 4. July 31, 2017 2 (two) registered valuers viz. RBSA Valuation Advisors LLP and Knight Frank (India) Private Limited, appointed determine the liquidation value of the Corporate Debtor. As per regulation 27 resolution professional was communicated to him on July 24, 2017, the CIRP Regulations of (existing as on July, 2017), the resolut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 21(1) of the Code requires an interim resolution professional to constitute a committee of creditors after collating the claims received and determining the financial position of the corporate debtor. Status: Compliant 8. August 21, 2018 The first list of creditors and report on constitution of CoC filed with this Hon'ble Tribunal. Due to claim being received from a new financial creditor, the list of creditors was updated and accordingly the CoC was reconstituted. As per regulation 17(1) of the CIRP Regulations, a report certifying the constitution of the CoC is required to be filed to the NCLT on or before the expiry of 30 (thirty) days from the date of this appointment. In the present instance, the order of NCLT! admitting the Company Petition was communicated to the Applicant resolution professional on July 24, 2018. Hence, the last date of submission was August 23, 2018. As per regulation 13(2)(d) of the CIRP Regulations, the list of creditors is required to be filed with this Hon'ble Tribunal. Status: Compliant 9. August 22, 2017 In accordance with regulation 36(1) of the CIRP Regulations (as then existing), information memorandum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibit D. As per regulation 17(2) of the CIRP Regulations, the first meeting of the CoC (seven) days of the |filing of the report is required to be convened within 7, (seven) days of the |filing of the report under regulation 17(1) of the CIRP Regulations. As per regulation 13(2)(e) of the CIRP As per regulation Regulations, the list of creditors is required to be presented at the first meeting of the CoC. Status: Compliant 12. September 13, 2017 Second meeting of CoC held. The Applicant apprised the participants that a list of creditors of the Company, updated as on September 12, 2017, in terms of Regulation 13 of CIRP Regulations was prepared by him and the same was duly circulated by email to all the members of the CoC. The members of the aforesaid list of creditors CoC the took note of Approval given for appointing SBI Capital Markets Limited as the Transaction Advisor Approvals for appointing certain other advisors were also provided. Minutes of second meeting of the CoC is enclosed hereto as Exhibit E. 13. September 16, 2017 The Resolution Professional invited prospective lenders, investors and other persons to submit 'Expressions ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tential resolution applicants, subject to the potential resolution applicants executing the NDA. 18. October 22, 2017 till November 5, 2017 Legal and financial due diligence of the Corporate Debtor was facilitated for the potential resolution applicants, and plant visits were organized for Raipur and Raigarh plants/facility of the Corporate Debtor. 19. November 17, 2017 Last date for submitting resolution plans. 29A The date for submission of resolution plan was initially extended till November 27, enable the potential submit resolution plans in due compliance of section introduced vide Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017. The above extension of time on both ratified by the CoC in the meeting held on November 30, 2017. Occasions was thereafter, till 2017, to 2017, and December 12. resolution applicants to 29A submit resolution plans due compliance of section introduced vide Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017. The above extension of time on both ratified by the CoC in the meeting held on November 30, 2017. Regulation 39(1) of the CIRP Code Regulations (as it stood then) provided that a a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to negotiate with the Resolution Applicant on behalf of the CoC. CoC also decided to seek extension of the period of CIRP for a further period of 90 section 12 of the Code and (ninety) days under authorized the Applicant to file an application before this Hon'ble Tribunal for this purpose. It was informed to all the participants that SBI, Financial Creditor had also engaged RBSA Valuation Advisors LLP for ascertaining the enterprise value of the Corporate Debtor. The members of the COC requested the Resolution Professional to circulate the said enterprise value report to all the financial creditors of the Corporate Debtor. CoC was also apprised of the updated list of creditors. Minutes of fifth meeting of the CoC is enclosed hereto as Exhibit H. As per section 12(2) of the Code (as it then), the resolution stood professional shall file an application to the Adjudicating beyond 180 do so by a resolution Authority to extend the period of the corporate insolvency resolution process (one hundred and eighty) days, if instructed to passed at a meeting of the committee of creditors by a vote of 75% (seventy-five) of the voting shares. Pursuant to the recently promul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ayment of liquidation value due to operational creditor Resolution Professional confirmed by way of an email that the requirements of Regulation 39(3A) of the CIRP Regulations, 2016 are satisfied. The CoC requested the Resolution Professional to appoint a suitable agency to carry out the feasibility and viability exercise on the plan on behalf of the CoC and place the report before the next CoC meeting for ratification. In this meeting, the special audit report prepared by Agrawal Anil & Co. Chartered Accountants on transactions as provided in Sections 43, 45, 50 & 66 of the Code was presented to the CoC by Mr. Anil Agrawal, Chartered Accountant. The members of the CoC discussed the report. CoC was also apprised of the updated list of creditors. Minutes of seventh meeting of the CoC is enclosed hereto as Exhibit J. 26. March 1, 2018 The Resolution Applicants submitted a revised resolution plan (hereinafter, the "Resolution Plan"). On the very same day, the Resolution Plan was shared by the Applicant with all the members of the CoC for obtaining their internal approvals. 27. March 26, 2018 The Applicant vide email informed the member....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the CIRP Regulations. Voting on the Final Resolution Plan was via electronic voting system as laid down in Regulation 25(5) of the CIRP Regulations. The electronic voting took place between April 9, 2018, 10.00 AM to April 10, 2018, 10.00 AM. Status: Compliant 33. April 13, 2018 Revised list of creditors of the Corporate Debtor updated as on April 7, 2018 filed with this Hon'ble Tribunal. 34. April 13, 2018 In accordance with section 30(6) of the Code, application 'filed before this Hon'ble Tribunal seeking approval for the Final Resolution Plan prior to the expiry of 270 (two hundred and seventy) days from the date of the admission of the Company Petition by this Hon'ble Tribunal. Pursuant to the Amendment Regulations issued vide notification dated February 6, 2018, sub- regulation (4) of regulation 39 of the CIRP Regulations was substituted to state that the resolution professional shall submit the resolution plan approved by the committee of creditors at least 15 (fifteen) days before the expiry of the maximum period permitted under section 12 for the completion of the corporate insolvency resolution process. However, the proviso ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l creditors and other creditors of the Corporate Debtor as per the waterfall mechanism mentioned under Section 53 of the Code is NIL. In the backdrop of it, the Resolution Plan approved by the COC discloses that the Resolution Applicant would make an upfront payment of amount equivalent to Rs. 2457 crores (less the liquidation value paid to the dissenting secured financial creditors) to the assenting secured financial creditors on pro rata basis alongwith conversion of an amount of Rs. 215.20 crores into equity shares of the Corporate Debtor allotted to assenting financial creditors in proportion to their admitted debt and would undertake deemed automatic conversion of the remaining admitted debt held by the assenting financial creditors into Optionally Convertible Preference Shares (OCPS) which shall be deemed to be purchased by the Resolution Applicant for an aggregate amount of Rs. 219.92 crores and OCPS would thereafter deemed to be extinguished in the manner provided in the Resolution Plan. Having regard to valuation of the assets of the Corporate Debtor company, we have noticed that the fair valuation of the company is almost double to the liquidation value given to the Corpo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion Applicant agreed to distribute among the operational creditors other than employees and workmen, debt valuing Rs. 114,81,27,623 (Exhibit A to the Affidavit filed by the Resolution Applicant on 13.7.2018), the Resolution Applicant is hereby directed to pay to the operational creditors on pro rata basis in compliance with principle of pari passu within one year from the date of delivery of this order, i.e. 24.07.2018. 11. In respect to treatment of other creditors, this approved resolution plan discloses that all other liabilities and obligations of the Corporate Debtor are being extinguished in full and all litigations and proceedings in respect to debts pending against the Corporate Debtor prior to commencement of CIRP shall stand abated as the liquidation value due to those creditors as per the waterfall mechanism in Section 53 of the Code is NIL, but whereas the Financial creditors and other creditors will continue to be entitled to enforce their rights against the existing promoters of the Corporate Debtor and the existing promoters will continue to be liable in relation to any pending litigation against them. Since the terms in respect to liabilities and obligations of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....any ("Bid Co") whose entire share capital will be directly or indirectiy held by the Resolution Applicants, with and into the Corporate Debtor. Pursuant to the merger, the Corporate Debtor will issue equity shares in the shareholding pattern of the Corporate Debtor as mentioned below: Category of Shareholder Total no. of Shares % of equity share capital Equity shares: Consortium (Resolution Applicants) 349,020,000 74.29 Others (including financial institutions and banks) 120,765,221 25.71 Total 469,785,221 100.00 Compulsorily convertible preference shares: CCPS held by Consortium post-merger 525,980,000 This Bench hereby approves the merger with the shareholding as mentioned above. 18. The Resolution Plan discloses a proposal for a slump sale of non-core assets of this Corporate Debtor to a newly incorporated subsidiary ("Newco"), 100% of the shares of the Newco are proposed to be sold at the fair market value carried out by the independent valuer to any person who is not disqualified under Section 29A of the Code. 19. On looking at this proposal, when this Bench has raised doubts about the Resolution Applicant's immediat....