Insolvent Companies

The wipeout of $17 billion worth of AT1 bonds in the UBS-Credit Suisse deal has spooked investors as they now assess if this can happen to their AT1 holdings in other banks as well

The National Company Law Appellate Tribunal (NCLAT) has rejected a plea by the shareholders of McDowell Holdings Ltd, challenging the initiation of the corporate insolvency resolution process (CIRP) against the firm. A two-member bench of the appellate tribunal upheld the order of the Bengaluru bench of the National Company Law Tribunal (NCLT), which on April 8, 2022, directed to initiate CIRP over the plea filed by its financial creditor Sunstar Hotels and Estates. Nine shareholders, who together hold more than 15 per cent of the stake in McDowell Holdings Ltd (MHL), had moved the NCLAT against the order. While rejecting the plea, the NCLAT observed that the shareholders "do not have any 'Locus', and therefore the present appeals are not maintainable." The appellate tribunal stated that in its earlier rulings, the NCLAT had "held that an investor in a Corporate Debtor cannot claim to be an 'aggrieved person' for preferring an appeal against an order against insolvency petition."

Goenka had appealed the NCLT's decision to allow IndusInd Bank to file for insolvency proceedings against Zee

In a last ditch effort, Srei Group promoters have submitted a resolution plan with the Srei administrator under Section 12A of IBC, offering to pay off dues of around Rs 32,000 crore to creditors to withdraw their companies from the ongoing insolvency process. Section 12A allows erstwhile management of corporate debtors to settle matters between creditors and withdraw cases under Corporate Insolvency Resolution Process ('CIRP'). According to sources, the offer from the Kanorias was the highest with a net present value of Rs 7,000 crore, including upfront cash of Rs 3,500 crore. While the rest of the entire debt will be repaid through a combination of financial instruments such as cash, Non-convertible debentures (NCDs), Optionally convertible debentures (OCDs), and equity over a period of five years, sources claimed. There is no official communication from the Kanorias. If any resolution plan comes, it will be reviewed to see whether it qualifies under Section 12A of the IBC and t

Faster insolvency resolution is crucial

Auto component manufacturing company undergoing insolvency proceedings

The banks will now be able to rely on government guarantees on the stop security receipts (SRs) issued by the NARCL during the liquidation proceedings

Judicial overreach and appropriation of power are slowing the insolvency process

Issues a separate circular on limitation period of show-cause notices

Restoring trust in IBC must be a priority

Yet to receive notice from NCLT, firm says; HFDC, IndusInd Bank had filed petitions earlier

IBC amendments likely in the Budget Session, MCA also rethinking priority given to govt dues in the waterfall mechanism

IBBI says while this reflects extent of value erosion by the time a corporate debtor enters CIRP, it remains the highest among all options available to creditors for recovery

Appearing for Twinstar, Senior Advocate Abhishek Manu Singhvi said their bid for Videocon Industries Limited was approved by the CoC during the insolvency process of the group

Insolvency professional agencies will have to designate/appoint a compliance officer

They have been losing business as the IBC process picks up pace

The NARCL will have the right to match any counteroffers, as the lenders have put the debt on the block

Court agrees with tribunal orders in Bhushan Steel's acquisition by Tata group firm

Earlier, the regulations only allowed the IPEs to provide support services to insolvency professionals

The National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal by Siemens Ltd against the invocation of its bank guarantees by Meenakshi Energy. Meenakshi Energy Ltd (MEL) which is presently facing insolvency proceedings, was setting up a 700 MW thermal plant, in which Siemens was a sub-contractor for the project. The appellate tribunal has upheld the earlier order of the Hyderabad bench of the National Company Law Tribunal (NCLT) in this regard and noted the bank guarantees were invoked by MEL on the ground that Siemens failed to perform its obligations in terms of the agreements. "... Also keeping in view that we do not find any material on record with respect to any fraud, we do not find any illegality or infirmity in the order of the Impugned Order (of NCLT)," said a two-member NCLAT bench. The Resolution Professional of MEL had sought permission for the release of Rs 2.50 crore and permitted it to be utilised against the overall outstanding amount of Rs 13.06 cror