insolvency: Another twist in Insolvency as NCLT passes a new order – The Economic Times–28.11.2017

The National Company Law Tribunal has for the first time directed that a liquidator be appointed in place of an existing resolution professional in the case of a company which has no feasible resolution plan in sight, marking a new chapter in the evolving Insolvency and Bankruptcy Code.

The tribunal has directed the winding up of Keshav Sponge and Energy, whose petition was admitted on February 16 this year. The company had filed the petition after it failed to repay more than Rs 85 crore to its creditors including Punjab National BankBSE -0.08 %. Delhi-based Adesh Kumar Mehta was appointed as the resolution professional.

“Since the committee of creditors unanimously has approved Mr Anil Agarwal as the liquidator for initiation of liquidation, the resolution professional already appointed is to be replaced,” judicial members Vijai Pratap Singh and Jinan KR said in their order from NCLT Kolkata.

Experts said the move is likely to create opportunities for specialisation and diversification among insolvency professionals.

Anil Goel, founder of AAA Insolvency Professionals said: “The order has empowered the committee of creditors. Earlier, creditors had no choice but to appoint the (existing) resolution professional as the liquidator. It is no more the case.”

“In future, there will be insolvency professionals who will be specialising only in liquidation process, thereby performing better in this job,” Goel said.

The committee of creditors had sought appointment of a liquidator instead of the existing resolution professional. It was not willing to continue the existing resolution professional as the liquidator had proposed the name of Anil Agarwal, another insolvency professional.

The tribunal said in its order that it would approve the plan in the interest of all stakeholders and in the interest of welfare of about 150 workers and nearly 600 persons who are directly or indirectly dependent upon the operation of the company for their livelihood.

The counsel for the promoter said that the liquidation value arrived at by the valuators was Rs 32.73 crore.

Earlier, the promoter of the company, Avinash Chandra Gupta, had submitted a resolution plan, which was rejected by the committee of creditors unanimously.

The company incurred a loss of Rs 20 crore in 2015-16 compared with about Rs 3 crore in the previous year.

via insolvency: Another twist in Insolvency as NCLT passes a new order – The Economic Times

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