Tag: Insolvency and Bankruptcy Code

Home buyer loses ₹50 lakh claim because she missed a deadline

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Go First sale: Sky One offers more money ahead of the bid review on Friday

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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CNBC-TV18 has learnt that Sharjah-based aviation solution provider Sky One has offered more money upfront in its bid to acquire the now insolvent airline, GoFirst.

The move has come before a likely meeting on Friday (March 22) when the lenders will review the bids on the table, according to a source.

According to a person in the know, Sky One is now offering lenders ₹750 crore, compared to ₹410 crore earlier. The bidder has also already offered to pay lenders 25% of the amount received from the settlement in the Pratt and Whitney case.

ALSO READ: Go First revival: The Dubai connection

CNBC-TV18 previously reported that GoFirst has received two bids for the airline: one from a consortium led by SpiceJet chief Ajay Singh and Nishant Pitti from Busy Bee Airways and the second from Sharjah-based Sky One.

According to sources, the other bidders, the Singh-Pitti consortium, have not revised their offer for GoFirst. They had offered to pay the lenders ₹290 crore upfront.

While this is less than the ₹750 crore offered by Sky One, the Singh-Pitti consortium has promised to pay the entire amount — compared to the 25% offered by the competing bidder, Sky One — received from the arbitration against engine maker Pratt and Whitney, a person directly in the know told CNBC-TV18.

CNBC-TV18 had earlier reported that with Corporate Insolvency Resolution Process (CIRP) costs estimated at ₹600 crore, financial creditors were concerned that the upfront money offered by the bidders (₹410 crore and ₹290 crore) don’t leave anything on the table for the lenders.

However, the revised offer from Sky One to pay ₹750 crore upfront may ease some of that concern.

Along with the review of the bids on Friday, the lenders will also determine whether the plans submitted comply with the rules and regulations under the Insolvency and Bankruptcy Code.

“Unless plans are compliant, they cannot be put to vote. Once compliance is ensured, negotiations will continue with both the bidders,” said this person.

How much is GoFirst expected to get from Pratt and Whitney settlement?

Neither of the suitors has indicated how much they expect to recover from Pratt & Whitney or when the settlement is expected.

However, according to one of the sources quoted above, the bidders expect over a billion dollars in settlement from Pratt and Whitney.

In May 2023, when GoFirst filed for bankruptcy, its then-CEO Kaushik Khona said that the airline expected $1.1 billion (about ₹9,100 crore at current exchange rate) in compensation from the US-based engine maker.

GoFirst had sued Pratt and Whitney in an international court for faulty engines, which led to 25 of the airline’s fleet getting grounded in May 2023.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

NCLT Kolkata admits 104-year-old PSU into insolvency process: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The National Company Law Tribunal (NCLT) at Kolkata on Tuesday, February 20, allowed insolvency proceedings against a 104-year-old company for failure to clear dues of over Rs 4 crore, according to a report on barandbench.com. The case involves the Ahmedabad-based private construction firm Chevrox Construction Pvt. Ltd against state-owned Bridge and Roof Co (India) Ltd.

Bridge and Roof is a public sector enterprise (PSU) under the Union Ministry of Petroleum and Natural Gas and comes under the administrative control of the Ministry of Heavy Industries.

Chevrox Constructions approached the Kolkata bench of the tribunal seeking to start the corporate insolvency resolution process (CIRP) against the PSU for an alleged default in payment of ₹4,47,90,393, the report added.

Judicial member Rohit Kapoor and technical member Balraj Joshi admitted the company into insolvency, observing that there is a clear debt and default in repayment of debt. It appointed Subodh Kumar Agrawal as the interim resolution professional for the insolvency process.

In its petition, Chevrox stated that it had signed eleven separate Letters of Intent (LoIs) for various sections of civil work in Gujarat with Bridge and Roof. The LoIs were in effect between December 2018 and February 2021. Chevrox noted that Bridge and Rof had not made the required payments even after finishing all the work.

In September 2022, it served Bridge and Roof with a demand notice under Section 8 of the Insolvency and Bankruptcy Code (IBC). Chevrox contacted the NCLT after receiving neither a response nor payment on the notice.

Bridge and Roof objected to the application, claiming that Chevrox had not finished the job. It also claimed that Chevrox failed to provide a final bill for payment within three months of the work’s actual completion.

The tribunal noted that Roof and Bridge had taken payments through June 2020 and that the bills for the subsequent time were being reviewed.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Expert panel recommends a new ‘rescue culture’ under the IBC: ‘Out of court’ settlements

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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An expert panel set up to study mediation under the Insolvency and Bankruptcy Code (IBC) has suggested a full-fledged framework to weave in ‘out of court’ settlements into the insolvency process.

The panel headed by former law secretary T K Viswanathan and comprising members of the IBC regulator the IBBI (Insolvency & Bankruptcy Board of India) has suggested a structured framework after detailed stakeholder consultations with industry, debtors, creditors and keeping the problem of judicial overload in mind.

The fundamental objective of the suggested ‘rescue culture’, is to expedite insolvency cases through voluntary mediation under the code, with suitable amendments to the law. The report notes this would lead to a reduction in caseload at the National Company Law Tribunal (NCLT).

The mediation framework also aims to provide a specialist mechanism and infrastructure, including specialist mediators under the code. Timelines under the code to remain sacrosanct, and mediation to be a parallel process. Implementation should be in phases with an identified genre of disputes to be referred for mediation.

The report notes, “The IBC processes are time-consuming, adversarial and resource intensive. In FY23 the average time taken for approval of the resolution plan by NCLT from the date of commencement of the Corporate Insolvency Resolution Process (CIRP) for 180 cases was 831 days.”

As of March 2023, approximately 67% of CIRPs have been ongoing for more than 270 days (with an outer limit of 330 days) which is the statutory timeline for completion of the CIRP under the IBC. The average time taken for closure of CIRP, ones leading to resolution plans is approximately 653 days and ones with liquidations is an average of 472 days.

Litigation in such proceedings appears to be one of the most significant time sinks, adding to the case docket of NCLT and the NCLAT, which also adjudicates other cases under the Companies Act and appeals about the Competition Act. This delay in resolution leads to substantive erosion of the asset value, directly impinging on the intended objectives of the IBC.

The expert panel notes that the statutory time limit has been especially unachievable in complex insolvency cases where most have crossed the 1,000-day mark. In this regard, even the Supreme Court has held the 330 maximum resolution time limit to be directory and not mandatory. For instance, in the case of Essar Steel vs S K Gupta, an overall timeline of 800 plus days was taken for resolution.

Thus the panel’s recommendations aim also to make voluntary mediation a way of introducing debtors and creditors to a new ‘rescue culture’ where they can ‘amicably resolve’ issues at the outset or once the insolvency process commences, thereby avoiding costly and infructuous litigation.

For instance, the report notes that data on the settlement or withdrawal of cases under IBC reflects that many insolvency cases may be applicable for ‘out of court’ resolution and thus unburden the NCLT and the appellate fora.

For instance, data compiled from courts and the IBBI shows, that till August 2023, 26518 applications for initiation of CIRPs of CDs having an underlying default value of ₹9.33 lakh crore were withdrawn before their admission. Meanwhile, the panel recommendations are being submitted to the
Ministry of Corporate Affairs (MCA) for the government’s due diligence.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Missed timelines, manpower crunch pose challenges for insolvency resolution proceedings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Resolution of most of the stressed assets under the insolvency law missed their timelines amid a shortage of staff at the National Company Law Tribunal (NCLT) and the appellate tribunal this year, which also saw aviation players seeking solace in insolvency provisions albeit without much success.

As the Insolvency and Bankruptcy Code (IBC) timelines stretched well beyond their specified limits, the companies undergoing the resolution process saw an erosion in the value of their assets.

As of September this year, creditors have realised Rs 3.16 lakh crore by way of resolutions under the IBC since it came into force in December 2016, as per data from the Insolvency and Bankruptcy Board of India (IBBI).

In 2024, NCLT and the National Company Law Appellate Tribunal (NCLAT) are expected to conclude important Corporate Insolvency Resolution Processes (CIRPs), including that of Future Retail, Go First and Reliance Capital.

The latest data showed that 67% of the ongoing CIRPs missed the 270-day deadline. In the June quarter, the average time taken for resolution reached a three-year high of 643 days for financial creditors.

Also Read: View: The curious case of insolvency battle over Rasna

Animesh Bisht, partner at law firm Cyril Amarchand Mangaldas, said the average time for a CIRP yielding resolution plans has increased to 662 days for operational creditors and 659 days for financial creditors as per the IBBI Quarterly Newsletter for June-September, 2023, exceeding the 270-day limit set by the IBC.

Currently, NCLT has 55 members as against the sanctioned strength of 63 members. In August 2023, the government had appointed 17 new members.

“Filling up the remaining vacancies would further help in increasing the disposal rate. In fact, given the increasing volume of cases the sanctioned strength of NCLT members ought to be further increased to ensure higher disposal rates,” Bisht said. Since the IBC came into force, 7,058 cases were initiated till September 2023. There are over 2,000 ongoing CIRP cases.

The aviation sector kept the insolvency ecosystem much engaged this year, including the IBBI amending the norms with respect to leased aircraft in the wake of the crisis at the now-grounded Go First.

NCLT and the National Company Law Appellate Tribunal (NCLAT) dealt with the matters of no-frills airline Go First, which went for voluntary insolvency resolution proceedings in May this year and the move was opposed by various lessors.

Besides NCLAT, several of them approached the Delhi High Court, which gave them relief regarding the inspection of their assets during the moratorium period under IBC. Assets refer to the aircraft that were leased to Go First when it was flying.

Also Read: Share of real estate recoveries under IBC rises to 18.8%, says report

Amid mounting concerns of lessors about their inability to take back the leased planes, the corporate affairs ministry on October 3 exempted transactions involving aircraft, plane engines, airframes and helicopters from the moratorium under IBC.

Meanwhile, companies from the manufacturing and real estate sectors accounted for half of the total admissions for insolvency proceedings. Regarding the delay in completing CIRP, advocate Rajsekhar Rao said it is a matter of concern.

“The larger questions of law (insolvency) which now to a large extent, have been settled by the Supreme Court, however, the same issues are constantly agitated. A large number of Section 9 petitions (those filed by operational creditors) are being entertained at the threshold,” he said. “There should be more rigorous scrutiny of section 9 at the threshold itself,” he said and added that such admissions should be limited.

Moreover, he highlighted that homebuyers now have effectively taken over the entire insolvency process. “In the process, the financial lenders who are the real financial creditors are taking a back seat,” he said.

Lakshmikumaran & Sridharan Attorneys – Partner, Yogendra Aldak said the increasing pendency of cases is a litmus test that illustrates the challenges faced by the tribunal.

“While the problem may be associated with the plethora of applications filed either to cause delays or to circumvent the jurisdiction of other courts/tribunals, it cannot be denied that the tribunal’s contradicting observations regarding statutory provisions result in prolonged litigation.

The need to increase the strength of the tribunal has often been highlighted,” he said. In 2023, the tribunal constituted 16 special benches to make up for absentee members, however, the efficacy of such measures remains wanting, both due to frequency and capacity.

The government has initiated a positive step by aiming to drastically increase the strength of sitting members in the NCLT to 163 and that in the NCLAT to 20, he said. Besides, Aldak also suggested the tribunal must aim to hold a unified approach for interpretation of the statues in order to avoid conflict and prolonged litigation.

Also Read: Relief for aircraft lessors, Ministry of Corporate Affairs amends IBC law

Advocate Abhijeet Sinha, who has represented before NCLAT in several insolvency matters, said that despite facing challenges such as limited members, it has practically achieved much more than it could have with the efforts put in by its members.

Advocate Rajsekhar Rao said that with more benches, things have started to move. “As regular hearings are taking place now, we will see more decisions coming out on more aspects as larger benches are constituted”.

According to NCLT Bar Association Secretary General and advocate Saurabh Kalia, NCLT clearing almost close to 190 resolution plans only shows the strides this law has taken in 2023. “We hope that with improved infrastructure and more members in the year 2024, IBC will take further strides,” he added.

Bisht also suggested setting up another NCLAT bench in Mumbai, which is the busiest of the NCLT Benches with six functioning courts. “It would be welcome and greatly help in reducing the time taken at the appeal stage for a final and interim order,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

GoFirst IBC Case: Lenders to reassess funding plan amid uncertain prospects

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Cash-strapped airline GoFirst’s Committee of Creditors (CoC) convened a meeting on November 6 amid growing uncertainty about the airline’s future, CNBC-TV18 has learnt. The meeting comes as a result of growing concerns about the airline’s future, leading banks to re-evaluate their funding plan, as per people in the know.

Earlier this year, CNBC-TV18 reported that lenders had given an in-principle approval for approximately Rs 450 crore in interim financing for GoFirst in June. However, since then, the situation has turned worse with the ongoing litigation in the lessors aircraft deregistration matter and a clear lack of interest from potential investors and suitors.

The airline has total liabilities amounting to ₹11,463 crore, of which the bank dues make up ₹6,521 crore. Lenders, including Central Bank of India, Bank of Baroda, Deutsche Bank, and IDBI Bank, are among the key creditors involved in the case.

The Delhi High Court is currently hearing a case involving the de-registration of GoFirst’s aircraft, which is scheduled to be heard next on November 10. If the airline receives an adverse ruling from the court, it could spell further trouble for its already precarious financial position.

The Directorate General of Civil Aviation (DGCA) had recently informed the Delhi High Court via an affidavit that the government directive exempting aviation leases from the bankruptcy moratorium should be applicable even to companies undergoing insolvency proceedings.

This came as earlier in October, the Ministry of Corporate Affairs issued a notification stating that the provisions of sub-section (1) of section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC), would not be applicable to transactions, arrangements or agreements, under the Convention and the Protocol, relating to aircraft, aircraft engines, airframes and helicopters. This would imply that aircraft, engine and helicopter leases and other agreements will not be bound by a moratorium.

Also Read |  More exits likely at Go First, banks unwilling to infuse more money: Sources

With the risk of deregistration looming and the airline’s financial troubles deepening, banks are left in a state of wait-and-watch.

The airline’s attempts to woo suitors have also not been successful. CNBC-TV18 had earlier reported that Jindal Power was the only player to submit an Expression of Interest (EOI) for GoFirst, with other lesser-known suitors not meeting the eligibility criteria from lenders. This lack of interest has left lenders in a tough spot, and they are unwilling to extend further loans to GoFirst in the absence of a viable revival plan, said a person in the know.

During the CoC meeting on November 6, lenders are expected to re-evaluate their funding plan and assess whether the airline has any realistic prospects for revival. While the possibility of liquidation is not being ruled out, it would represent a challenging outcome for all parties involved, said a banking executive on the condition of anonymity.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Jettwings, Jindal Power put in EoIs for bankrupt Go First

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Northeast-based Jettwings Airways has submitted its Expression of Interest (EoI) for Go First Airlines, currently facing a corporate insolvency resolution process, the company said in a statement. Sanjive Narain and Anupma Sarma are the promoters of the Guwahati-based Jettwings Airways.

Jettwings Airways recently received a No Objection Certificate (NOC) from the Civil Aviation Ministry to operate as a scheduled commuter airline. The carrier in the statement also said it has robust plans to connect major destinations across the country with its base in Guwahati.

Apart from Jettwings Airways, Jindal Power has also put in its preliminary bids for the bankrupt Go First. News agency Press Trust of India (PTI) quoted an industry source saying, “Jindal Power may go for a bid if they find a relatively cheaper valuation. The company has submitted an EoI to get a valuation of the asset & its documents, and is evaluating every aspect minutely.”

The final list of prospective resolution applicants will be issued in the coming weeks and the Request for Resolution Plan (RFRP) will be issued. Under IBC, a period of 30 days is allowed for suitors to submit bids from the date of issue of RFRP. Meanwhile, the 180-day period for CIRP completion for Go First is set to end on November 6 and lenders are expected to take a call on seeking extension.

Budget carrier Go First stopped flying on May 3 and went for a voluntary insolvency resolution process. Go First’s total revenue from operations stood at Rs 4,183 crore in the financial year 2021-22.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

NARCL likely to wind up Srei group’s equipment finance arm; retain SIFL for business continuity

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After completion of the takeover of two Srei group firms through the NCLT route, state-owned asset reconstruction company NARCL is expected to retain only one of the acquired companies, official sources said.

The Kolkata bench of the National Company Law Tribunal (NCLT) has approved the resolution plan of NARCL for the takeover of the twin Srei firms under the Insolvency and Bankruptcy Code.

The resolution plan had already received approval from the banking sector regulator Reserve Bank of India.

NARCL emerged as the winning bidder for the two Srei group firms — Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL) — through a bidding process in February.

“According to the resolution plan submitted, the National Asset Reconstruction Company Ltd (NARCL) will cease all fresh lending activities in the group’s equipment financing arm — SEFL, and after recovering the outstanding debt, it will be ‘wound up’,” the official told PTI.

The loan repayment process may extend for the next seven years, he said.

Also Read: Mercedes Benz says sedan demand remains strong despite surge in SUV growth

At present, most of the assets remain within SEFL’s books due to a previous restructuring.

“As outlined in the resolution plan, NARCL, upon assuming control of the companies, will abstain from pursuing fresh lending from SEFL. The non-banking financial company (NBFC) will be dissolved once its outstanding debt is recuperated and ongoing court cases are settled,” an official close to the development told PTI.

“SIFL with a cleaner balance sheet and a few legal imbroglios will be revitalised, and fresh lending operations will be conducted under this entity. Regulatory authorities are also aligned with this perspective, as previously discussed,” the official said.

This strategy aims at ensuring business continuity and safeguarding employment.

Kanorias, the erstwhile promoters, did not offer any comments on the development. No official comments were received from NARCL.

On February 15, the Committee of Creditors (CoC) for the Srei group firms endorsed NARCL’s resolution plan, which garnered the highest vote share of 89.2 percent. There were three final contenders for Srei companies.

Also Read: Mercedes Benz says sedan demand remains strong despite surge in SUV growth

NARCL offered a Net Present Value (NPV) bid of Rs 5,555 crore. Authum Investment and Infrastructure secured the second-highest vote with 84.86 percent through a bid of Rs 5,526 crore.

The consortium comprising Varde Partners and Arena Investors with a financial bid of approximately Rs 4,680 crore, secured the third spot with around nine percent of the vote, according to the official.

The total value of NARCL’s resolution plan stands at Rs 14,301 crore, encompassing a cash component of Rs 3,001 crore, debentures and security receipts amounting to Rs 3,300 crore, along with an uncommitted payment of Rs 8,000 crore via Optionally Convertible Debentures (OCDs).

These payments are contingent upon the recovery from underlying assets over the ensuing seven years.

Creditors accepted a haircut of 55 percent, considering a complete retrieval of the uncommitted value of Rs 8,000 crore. The cumulative claims of financial creditors for the two NBFCs amounted to Rs 32,750.22 crore.

Also Read: Asahi Songwon Colors to sell land parcel in Gujarat for Rs 47 crore, shares drop

The Reserve Bank of India superseded the boards of SIFL and SEFL in October 2021 due to governance concerns and repayment defaults.

Subsequently, the banking regulator approached the NCLT Kolkata to initiate the insolvency proceedings against the twins for a consolidated resolution.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Go First former CEO Kaushik Kona, IRP Shailendra Ajmera at DGCA office, likely to submit revival plan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Crisis-hit airline Go First’s former CEO Kaushik Kona and the interim resolution professional (IRP) Shailendra Ajmera reached the aviation regulator’s office on June 28. They are likely to submit the revival plan to the Directorate General of Civil Aviation (DGCA).

Earlier this week, three people familiar with the matter had told CNBC-TV18 that Go First’s lenders have given an in-principle nod for approximately Rs 425 crore interim financing to the cash-strapped airline. The interim financing is intended to support the day-to-day operations of the airline and facilitate its revival, they said.

Banking executives, meanwhile, said the final approval from the banks is contingent upon the DGCA granting permission to Go First to restart its operations.

“We will seek individual board approval for financing only once there is an assurance from DGCA about restarting Go First operations. As of now, this is only in-principle approval which IRP (insolvency resolution professional) had sought,” said one of the bankers to the airline. This move underscores the cautious approach taken by the lenders, ensuring that the airline has the necessary regulatory clearance before disbursing funds.

The developments come as Go First, formerly known as GoAir, has been grappling with financial difficulties, which led to its admission into the Insolvency and Bankruptcy Code (IBC) on May 10. The airline has outstanding debts amounting to Rs 6,521 crore, owed to various banks including Central Bank of India, Bank of Baroda, Deutsche Bank, and IDBI Bank.

The cash-strapped airline filed for bankruptcy, blaming ‘faulty’ Pratt & Whitney engines which led to the grounding of half its fleet, and revenue hit.

As part of the ongoing financial restructuring efforts, Go First has cancelled all its flights until June 30, as of now. This temporary halt in operations is aimed at minimising costs and conserving resources while the airline works towards resolving its financial woes.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance Capital IBC case: NCLAT notice to Torrent, others over lenders’ plea on second bidding round

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The National Company Law Appellate Tribunal (NCLAT) on Tuesday issued notices to Torrent Investments and other respondents on a plea filed by the lender of Reliance Capital seeking a second round of financial bids.

A two-member NCLAT bench headed by Chairperson Justice Ashok Bhushan issued the notices and directed the respondents to file replies within three days. The appeal would be heard on February 9, the tribunal said.

This comes against the backdrop of Vistra ITCL (India) Ltd, one of the members of the Committee of Creditors of Reliance Capital, moving the NCLAT against a National Company Law Tribunal (NCLT) order that stated the extended challenge mechanism proposed by Reliance Capital’s lenders was not in compliance with IBC regulations.

Earlier on February 2, NCLT bench concluded that the challenge process concluded on December 22, 2022 with the declaration of highest net present value (NPV) of Rs 8,640 crore offered by Torrent. The tribunal declared that the process note for the second challenge mechanism was in violation of Regulation 39(1)(A)of the Corporate Insolvency Resolution Process (CIRP) regulations.

It upheld the plea by Torrent Investments challenging bankers’ decision to go for the second round of auctions in pursuit of higher value for the bankrupt company.

Torrent Investments had filed a plea on January 9, requesting the tribunal to quash the lenders’ plan to hold a fresh auction for the takeover of RCap. Torrent was the highest bidder offering Rs 8,640 crore in the last round of the ‘challenge mechanism’.

Reliance Capital has a consolidated debt of about Rs 40,000 crore.

(With PTI inputs)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow