National Company Law Tribunal (NCLT) has initiated CIRP on application of one of Operational Creditors of DOP Ltd. A Resolution Professional was appointed after all processes as per the Law. Two viable Resolutions Plans
CS Professional · Insolvency - Law and Practice · PYQS · June 2021
National Company Law Tribunal (NCLT) has initiated CIRP on application of one of Operational Creditors of DOP Ltd. A Resolution Professional was appointed after all processes as per the Law. Two viable Resolutions Plans (Plan A and Plan B) were received. Committee of Creditors comprises of Three Financial Creditors. As per Regulations of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, what is the approval status of Resolution Plans (Plan A and Plan B) for various instances of Voting outcome as mentioned below ? Voting Outcome in different scenarios % of votes in favour of % of votes against Plan A Plan B Plan A Plan B 1 52 64 48 36 2 64 78 36 22 3 78 78 22 22 Also clarify the requisite voting percentage and tie-breaker formula as per the aforesaid Regulations.
Answer & Explanation:
Status of Voting outcome: Voting outcome 1 No Plan is approved, as neither of the Plans received requisite votes. The committee shall vote again on Plan B, which received the higher votes, subject to the timelines under the Code. Voting outcome 2 Plan B is approved, as it received higher votes, which is not less than requisite votes. Voting outcome 3 The committee shall approve either Plan A or Plan B, as per the tie-breaker formula announced before voting. As per the amended Provision of Regulation 39 of IBBI (CIRP) Regulations the requisite vote for approving the Resolution plan is 66% (Reduced from 75%). Tie-breaker formula is a method to break the equality in votes. This has to be decided prior to the meeting and should be communicated to all CoC Members.
Topics: Resolution Plan
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