BK Private Limited (Corporate Debtor) went into liquidation as no Resolution Plan was received during the Corporate Insolvency Resolution Process. The Corporate Debtor was into auto component manufacturing business. Tota
CS Professional · Insolvency and Bankruptcy - Law and Practice · PYQS · December 2024
BK Private Limited (Corporate Debtor) went into liquidation as no Resolution Plan was received during the Corporate Insolvency Resolution Process. The Corporate Debtor was into auto component manufacturing business. Total Liabilities of BK Private Limited is ₹200 crores and total liquidation value of available assets of the Corporate Debtor is ₹140 crores. As per the Valuation Report submitted by the Valuers appointed by the Liquidator, the total assets comprised of Land- ₹60 crores, Buildings- ₹40 crores, Plant and Machineries- ₹20 crores, Other Tangible Fixed Assets- ₹5 crores, Inventories- ₹3 crores, Receivables- ₹9 crores and Not Readily Realisable Assets- ₹3 crores. Further in their Valuation Report, the Valuers have reported that the Value of Business without Land and Buildings would be ₹50 crores. The Liability of the Corporate Debtor comprises of the following: The total secured debts are ₹180 crores lent by 3 Banks; Bank A has lent- ₹90 crores, Bank B has lent- ₹60 crores and Bank C has lent- ₹30 crores. All Banks are having equal charge/ right over the assets of the Corporate Debtor. Apart from the above, Workmen dues for 24 months are ₹2 crores and Employee dues for 24 months are ₹4 crores. Operational debts ₹6 crores and Government dues ₹4 crores. The Insolvency process cost including Liquidator Fee is ₹4 crores. The Liquidator of BK Private Limited, approached you to suggest on the various options available for sale of assets of BK Private Limited as per IBBI (Liquidation Process) Regulations, 2016. Prepare a lot-wise list showing different sale options with values to help the Liquidator to proceed further in the Liquidation process.
Answer & Explanation:
Regulation 32 of IBBI (Liquidation Process) Regulations provides that the liquidator may sell: an asset on a standalone basis; the assets in a slump sale; a set of assets collectively; d) the assets in parcels; the corporate debtor as a going concern; or the business(s) of the corporate debtor as a going concern The assets of the corporate debtor can be sold in auction on the following basis: Lot Description Value Lot 1 The Corporate debtor as a going Concern Value of all assets of the Corporation Debtor as a going concern - ₹140 Crores Lot 2 The business of the corporate debtor as a going concern Value of Business of the Corporate Debtor as a going concern - ₹50 Crores (Other than Land and Building) Lot 3 Land and Building and Plant Machinery on collective basis Value of Land and Building and Plant and Machinery of the Corporate Debtor on collective basis -₹120 Crores Lot 4 Land and building alone excluding all other assets Value of Land and Building alone of the Corporate Debtor on standalone basis - ₹100 Crores Lot 5 Plant Machinery alone excluding all other assets Plant and Machinery alone of the Corporate Debtor on standalone basis- ₹20 Crores Lot 6 Parcel of Current Assets of the Corporate Debtor Other tangible assets, Stocks of the Corporate Debtor - ₹8 Crores Lot 7 Stocks of the Corporate Debtor Stocks of the Corporate Debtor - ₹3 Crores
Topics: Liquidation Process
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