Corporate Law Corner Part B: Insolvency and Bankruptcy Law

IDBI Bank filed an application u/s 7 of the IBC for initiation of CIRP. The NCLT admitted the application, and CIRP was initiated. The RP had presented a Resolution Plan before the CoC. The Plan could not meet the requirement of receiving 66% votes. Later, the RP filed an application seeking initiation of the liquidation process. The appellant, the promoter, filed a settlement application before the NCLT u/s 60(5) of the IBC, showing his willingness to offer a one-time settlement plan.

The appellant sought necessary directions to the CoC to consider the terms of the Settlement Plan as proposed by him. Deliberations took place in the COC meetings with regard to the said Settlement Plan. Initially, the Plan received only 70.63% votes. Subsequently, one of the financial creditor having a voting share of 23.60%, decided to approve the Settlement Plan. The Plan stood approved by more than 90% voting share; the RP filed an application seeking necessary directions. The NCLT ordered the RP to reconvene a meeting of the CoC and place the e-mail of financial creditor before it. Accordingly, in the 17th CoC meeting, the Settlement Plan was approved with a voting majority of 94.23%. Accordingly, the RP filed an application bef