Page 12 - Insolvency And Bankruptcy Code

NCLAT rejects insolvency proceedings plea against Aditya Birla Fashion

The National Company Law Appellate Tribunal (NCLAT) on Tuesday dismissed a plea of an operational creditor to initiate insolvency proceedings against Aditya Birla Fashion and Retail Ltd (ABFRL). The appellate tribunal upheld the order of the Mumbai bench, which had on October 11, 2023, dismissed the plea of In Style Fashion on the ground of pre-existing dispute. "Considering the overall facts and circumstance of the present case and in view of the foregoing discussion, we are satisfied that the Adjudicating Authority (NCLT) did not commit any error in rejecting the Section 9 Application filed by the Appellant on the ground of pre-existing dispute," said the NCLAT. In Style Fashion was a franchisee and commission agent for running the showroom of ABFRL. However, the NCLAT also said, "We do not agree with the finding of the Adjudicating Authority that the Section 9 application was time-barred and hit by limitation". Meanwhile, the appellate tribunal said the operational creditor has

SSW to invest Rs 138 cr in AMW Autocomponent, part of insolvency resolution

Steel Strips Wheels Ltd (SSWL) will invest Rs 138 crore in AMW Autocomponent Ltd as part of an insolvency resolution plan. The company's board has decided on the plan after the Ahmedabad Bench of the National Company Law Tribunal gave its nod for its resolution plan for AMW Autocomponent, a regulatory filing said on Tuesday. "SSWL shall infuse Rs 138.15 crore into AMW Autocomponent Limited(AACL) through a mix of equity and debt as per the resolution plan approved by NCLT Ahmedabad," it said. The amount will be utilised as full and final settlement of financial creditors, operational creditors, workmen/employees and other creditors of AACL, and will be treated as full discharge of SSWL's obligation under the approved resolution plan, it added. SSWL is into designing and manufacturing automotive wheels, both under the steel & alloy categories.

IBC yet to address resolution for insolvencies of group companies

Group insolvency remains an ill-defined area in the IBC. Here's why it needs a clear framework

Missed timelines, manpower crunch pose challenges for insolvency resolution

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 per cent of the ongoing CIRPs misse

IBBI forms panel of 787 professionals to expedite resolution process

This move by the insolvency regulator aims to avoid delays and preserve asset value amid rising stressed cases

Pratt & Whitney engines caused damage of Rs 10,000 crore to Go First: Wadia

Nusli Wadia said that P&W engines started failing right from the earliest delivery in 2017 'not just once, but several times'

Axis Bank files corporate insolvency plea against Zee Learn with NCLT

Zee Learn said that the firm is compiling information to verify the facts claimed in the said petition

Resolution professional seeks EOI for Future Enterprises, sets deadline

The Kishore Biyani-promoted company has two garment manufacturing units located at Tarapur-Palghar in Maharashtra and Mahadevapura-Bengaluru in Karnataka

MCA planning new portal to streamline IBC cases, boost transparency

The IBBI would also be able to keep track of the happenings in the NCLT through this portal

Centre asks state-run banks to review top 20 insolvency cases monthly

The government has asked for reviews of insolvency cases as there are delays in admission of cases in insolvency courts

Government may implement 2-month asset freeze of airlines under insolvency

To prevent immediate repossession of aircraft by lessors after default, the government is contemplating a two-month moratorium rule for the aviation sector

Centre likely to review IBC Bill only after 2024 general elections

The decision to revisit the proposed amendment Bill is also in the backdrop of frequent amendments that the IBC has undergone since its introduction in 2016. The law has been changed six times so far

JSL gets board approval to acquire Rabirun Vinimay for Rs 96 crore

Jindal Stainless Limited (JSL) on Tuesday said its board of directors has approved the acquisition of Rabirun Vinimay Private Ltd which is under liquidation. The cost of the acquisition is Rs 96 crore, JSL said in a regulatory filing. "The Board of Directors accorded its consent for acquisition of 100 per cent stake in Rabirun Vinimay Private Limited (RVPL), a company under liquidation, on a going concern basis, in terms of the applicable provisions of Insolvency and Bankruptcy Code, 2016," it said. JSL said RVPL has potential downstream cold-rolling manufacturing capacity of 250 KTPA (kilo tonne per annum) for wider and thinner segment besides having a capacity of 50 KTPA for pipe and tube segment. Its plant is located at Vidyasagar Industrial Park, Kharagpur, West Bengal over 60 acres of land area. The plant is currently shut down. "The proposed acquisition would complement the management's objective of increasing the cold-rolling capabilities of going thinner with wider width to

Lanco Amarkantak Power creditors to vote on Adani Power's Rs 4,100 cr bid

An unsolicited bid of Rs 3,650 crore was submitted by Adani Power, which was later improved to Rs 4,100 crore

NCLT rejects insolvency plea against SpiceJet by lessor Willis Lease

In a relief to low-cost carrier SpiceJet, the National Company Law Tribunal (NCLT) on Monday dismissed an insolvency petition by aircraft lessor Willis Lease Finance Corporation which is claiming dues. A two-member Delhi-based NCLT bench rejected the plea moved by US-based Willis Lease Finance Corporation after SpiceJet questioned the maintainability of the petition. SpiceJet opposed the plea contending that Willis Lease Finance Corp has withdrawn its insolvency plea for the same dispute in March 2023 and has approached again with a new plea. During a hearing in July this year, the NCLT bench wanted to know from Willis Lease Finance Corp, as to how it filed a fresh petition again for a similar cause of action within a few months, without even sending a notice to SpiceJet as per the provisions of the Insolvency and Bankruptcy Code, 2016. Besides Willis Lease, SpiceJet is facing insolvency pleas filed by three other aircraft lessors -- Aircastle Ireland Ltd, Wilmington, and Celestial

Centre says over 106,000 companies voluntarily exited in last five years

More than 1 lakh firms voluntarily exited under the companies law in nearly five years, the government said on Monday. Besides, many companies have sought voluntary liquidation under the Insolvency and Bankruptcy Code (IBC). "From FY 2018-19 to FY 2023-24 (up to 30th November, 2023) 1,06,561 companies have exited voluntarily under section 248(2) of the Companies Act, 2013. "From FY 2018-19 to FY 2023-24 (up to 30th September 2023) final reports of 1,168 companies have been submitted by liquidators under section 59 of the Insolvency and Bankruptcy Code, 2016 (Code), of which final dissolution orders have been passed by NCLT in 633 cases during the said period," Union Minister Rao Inderjit Singh told the Lok Sabha. Section 248(2) of the Companies Act pertains to voluntary exit of companies while Section 59 of the IBC relates to voluntary liquidation of companies. In the last five years, Singh said the time taken for voluntary exit under Section 248(2) of the Companies Act, 2013 has

IBC has been revolutionary, but it's time for improvement and tweaks

Insolvency cases remain pending for months and years, deterring stakeholders. It is imperative that litigation be reduced

Guaranteeing personal guarantees

Through its recent judgment the apex court has rescued the institution of surety

IBC recoveries declining, resolution timelines getting prolonged: Crisil

Introduction of a focused bankruptcy law has helped improve the credit culture in India, but the last few years have seen a decline in recoveries and the resolution timelines getting prolonged, Crisil Ratings on Friday. In a note to observe the seven years of the Insolvency and Bankruptcy Code (IBC), the rating agency said the recovery rates have fallen to 32 per cent in September 2023, from 43 per cent in March 2019. At the same time, the average resolution time has increased from 324 days to 653 days, versus the stipulated 330 days, it said. The IBC has helped in resolving debt worth Rs 3.16 lakh crore stuck in 808 cases in the past seven years, the leading credit rating agency said. Its senior director Mohit Makhija said the IBC is "the most potent code" in India's corporate loan history, which has brought a "behavioural change" in borrowers. "The fear of losing companies has led to over Rs 9 lakh crore of filed debt being settled before the cases arrived at the IBC doorstep fo

NCLT extends insolvency process of grounded airline Go First by 90 days

The tribunal has also asked the resolution professional (RP) of the airline to submit a 90-day action plan