First liquidation order under the Insolvency Code passed by the NCLT

The Hyderabad Bench of the NCLT has orally pronounced the first liquidation order under the Insolvency and Bankruptcy Code, 2016. VNR Infrastructures Ltd., the corporate debtor, had filed for initiation of insolvency resolution process in December 2016, under section 10 of the Code, after its proceedings at the BIFR stood abated due to notification of provisions of the Code. The BIFR had also concluded that VNR was a sick company. In February, the NCLT passed an order admitting the application and appointed an interim resolution professional (IRP). The Committee of Creditors (CoC), which is constituted under section 18 of the Code, was unable to arrive at a resolution plan to revive the corporate debtor whose net worth has been completely eroded. While the IRP sought to extend the moratorium period by 90 days by invoking section 12 of the Code, the CoC unanimously rejected for any such extension. Following the IRP’s report for liquidation of the Company, the Bench reserved the matter for (final) orders, with a clear intention of liquidating the debtor company.

August 17th, 2017