In the chronicles of aviation woes, the Go First (formerly recognized as Go Air) insolvency saga has proven resilient, maintaining a simmering presence. Here’s the tale: The narrative commenced with Go First, rebranded from Go Air, opting for voluntary insolvency under Section 10 of Insolvency and Bankruptcy Code, 2016 owing to substantial revenue losses, primarily attributing blame to the American aircraft makers, Pratt and Whitney. On the 10th of May in the year 2023, the National Company Law Tribunal (NCLT) officially admitted the insolvency petition. Since then, a year has elapsed, yet the insolvency remains unresolved Despite NCLT’s benevolence in granting three extensions thus far, Go First finds itself in the last leg of extension. This lifeline has recently been granted by the Adjudicating Authority, paving a path towards concluding the Corporate Insolvency Resolution Process by the deadline of 3rd August, 2024. IDBI Bank, Bank of Baroda, Central Bank of India are some of the few lenders in the Go First's case Let's see if the law of the land revives Go First or if it heads towards liquidation. #law
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INDIA TODAY 8TH APRIL 2024 GO FIRST AIRLINE GIVEN EXTENSION FOR RESOULTION PLAN BY NCLT UPTO 3RD JUNE 2024 WHICH DOWN SHUTTER LAST YEAR ON 2ND MAY 2023 The National Company Law Tribunal (NCLT) on Monday approved another 60-day extension to the bankrupt Go First airline to complete its corporate insolvency resolution process (CIRP). The extension will be effective till 3 June, and has been allowed keeping in mind the interest of stakeholders, as per the NCLT. India's insolvency laws mandate completion of a corporate resolution process in 180 days, extendable by another 90 days. However, it must be completed in no more than 330 days in total. A previous extension, from 4 February to 4 April, exhausted the 330-day deadline to complete the resolution process. However, under exceptional circumstances, the NCLT agreed to give Go First another 60 days, as the resolution plans were nearing completion. https://lnkd.in/grBZFnJ3
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JSA Prism | Insolvency | November 2024 Supreme Court of India orders for liquidation of Jet Airways (India) Limited and recommends reform in the Insolvency and Bankruptcy Code, 2016 The Hon’ble Supreme Court of India (“Supreme Court”) ordered for liquidation of Jet Airways (India) Limited, exercising the plenary powers under Article 142 of the Constitution of India, considering, inter alia, the passage of more than 5 (five) years since the approval of resolution plan. Interestingly, the Supreme Court referred to this prolonged litigation as an eye-opener, and highlighted deficiencies in the working of Insolvency and Bankruptcy Code, 2016 as well as in the functioning of National Company Law Tribunal and the National Company Law Appellate Tribunal. Supreme Court has, therefore, given key suggestions for reform in the Insolvency and Bankruptcy Code, 2016. To read further details, please click here: https://lnkd.in/gjcFqDbi Amit Kapur | Ayush Agarwala | Suvaaankoor Das | Rishab Aggarwal #jsa #insolvencylaw #insolvencyandbankruptcy #jsaprism #nclat #committeeofcreditors #resolutionplan #leadinglawyers #leadinglawfirm
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Supreme Court Orders Liquidation of Jet Airways After SRA's Repeated Delays: It means no more Jet Airways airline in future. In a recent judgment, the Supreme Court of India ordered the liquidation of Jet Airways, rejecting the revival efforts led by the Successful Resolution Applicant (SRA)/Successful bidder, the consortium of Murari Lal Jalan and Florian Fritsch. This decision underscores the court's commitment to enforcing strict timelines under the Insolvency and Bankruptcy Code (IBC) and addresses concerns about the potential misuse of the judicial process in insolvency proceedings. Facts of the Case: 1) Jet Airways entered insolvency proceedings in 2019, and a revival plan by the SRA was approved in 2021. The SRA committed to an infusion of funds with specific timelines, including a first tranche of ₹350 crore to be paid within 180 days of the "Effective Date." 2) Despite multiple extensions granted by NCLT, NCLAT, and even the Supreme Court, the SRA failed to meet the critical payment deadlines 3) The Supreme Court observed that the SRA’s repeated delays and requests for further time amounted to an abuse of judicial leniency. Judgement: a) The court noted that prolonged delays by the SRA had already degraded Jet Airways' potential for revival. b) The court underscored that non-compliance with Resolution Plan terms, especially after multiple extensions, leaves no choice but liquidation, as per Section 33(3) of the IBC. c) The court’s decision highlights that the judicial process cannot be used as a tool to delay proceedings without consequence. d) As a direct penalty, the court ordered the forfeiture of the SRA’s initial deposit of Rs. 200 Crore and encashing Performance Bank Guarantee of Rs. 150 Crore. The SRA’s failure to adhere to the Resolution Plan could have long-term reputational effects, potentially influencing its credibility in future. #IBC #InsolvencyLaw #Banking #FinancialInstitutions #CorporateLaw#LegalUpdate, #lawnews, #legaltrends
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Supreme Court Orders Liquidation of Jet Airways! The Supreme Court has officially ordered the liquidation of Jet Airways, once India's premier airline, after the failure of the Resolution Plan by the Jalan-Kalrock Consortium (JKC). After years of legal battles and failed attempts at revival, the court has ruled that liquidation is in the best interest of creditors, employees, and other stakeholders. Despite the National Company Law Appellate Tribunal (NCLAT) approving the takeover by JKC, the consortium failed to infuse the promised ₹350 crore, leading to this final decision. The court's ruling underscores the importance of adhering to commitments in insolvency processes, especially when livelihoods and industries are at stake. This marks the end of an era but also opens up important discussions on how we can better manage corporate insolvencies in the future.
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On 06 August 2024, the Insolvency and Bankruptcy Board of India released the “Guidelines for the Committee of Creditors” outlining nine considerations for timely resolution of insolvency of the corporate debtor. In the present update, we discuss the guidelines. #India #InsolvencyAndRestructuring #Guidelines #IBBI #CommitteeOfCreditors https://lnkd.in/gC-3xzMk
IBBI Guidelines for the members of Committee of creditors - Acuity Law
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🚨IBC May Get a Voluntary Group Insolvency Mechanism Soon!🚨 India is preparing to introduce a voluntary group insolvency framework under the Insolvency & Bankruptcy Code (IBC). This new framework will facilitate the joint resolution of stressed entities within a domestic corporate group, recognizing their interconnected nature. Expected to be tabled in the winter session of Parliament, this move could be a significant step forward for group insolvency resolution. Key Highlights: ●Committees of creditors of bankrupt group companies can decide whether to pursue resolutions collectively or separately. ●The framework will apply only to bankrupt entities within the group, leaving solvent companies unaffected. ●Initially, domestic corporate groups will be included, while financial service providers and multinational groups will be kept out. This change follows high-profile cases like Videocon, where a coordinated group insolvency process helped accelerate resolution. With this mechanism, creditors can leverage their commercial wisdom to either maximize gains through joint efforts or continue separate processes. #Insolvency #IBC #GroupInsolvency #CorporateLaw #LegalUpdates #Restructuring #BankruptcyLaw #FinancialCreditors #InsolvencyReform #IndiaInsolvency
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Extension under IBC provided more than once?? As per IBC, Section 12(3) states On receipt of an application under sub-section (2), if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days: Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once. Further On 4th Feb 2024, Go First RP has filed for further second extension in exceptional cases stating 3 parties shown interest in taking over the Carrier and also deposit earnest money. Hence,On 13th Feb, Today NCLT extended the time limit for a further 60 days in an exceptional case. Furthermore, If the airline finds no takers even after 330 days, it is most likely to go into liquidation. Takeaway:- Section 12(3) first provision even though states the Extension can be grant at once and rest 60 days is for Legal proceedings but NCLT can use their discretionary power to provide second extension only in Exceptional case. https://lnkd.in/dCYtgy39
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JSA Prism | Insolvency | March 2024 NCLT has inherent power to recall an order passed by it for approving a resolution plan A 3 (three) judge bench of the Hon’ble Supreme Court of India, headed by Chief Justice of India, held that (a) the National Company Law Tribunal has inherent powers to recall its own order(s), which includes an order approving resolution plan for a corporate debtor; and (b) even if a claim submitted by a creditor is in a form not specified under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 the same has to be given due consideration by the Resolution Professional. To read further details, please click here: https://lnkd.in/gCbaUbWt Varghese Thomas | Aditi Sehgal | Fatema Dalal Kachwalla | Ahsan Allana | Bhaskar Dhandharia #jsa #leadinglawfirm #leadinglawyers #legalupdates #insolvencylaw #prism
NCLT has inherent power to recall an order passed by it for approving a resolution plan - JSA
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Pre-packaged Insolvency in India In a significant move aimed at early detection of financial distress, the government introduced the Pre-Packaged Insolvency Resolution Process (PPIRP) in April 2021. This initiative is designed to swiftly and efficiently address corporate financial challenges, providing predictability in outcomes and enhancing value for both creditors and debtors. However, as of May 2024, only fifteen PPIRP applications have been considered. Of these, two cases were withdrawn one before admission and another after and two cases were dismissed by the NCLT. Among the remaining eleven cases, five have been resolved, while six are still under consideration. One notable case, involving Sudal Industries Limited, saw the NCLT’s decision overturned by the NCLAT. This case highlights the ongoing complexities and judicial scrutiny surrounding PPIRP. Total PPIRP Cases Resolved: 1. Amrit India (NCLT New Delhi) 2. Sudal Industries Limited (NCLT Mumbai) 3. GCCL Infrastructure and Projects (NCLT Ahmedabad) 4. Enn Tee International Limited (NCLT New Delhi) 5. Shree Rajasthan Syntex Limited (NCLT Jaipur) Admitted and Pending Resolution: 6. Mudraa Lifespaces Private Limited (NCLT Mumbai) 7. Shreemati Fashions Private Limited (NCLT Kolkata) 8. Kratos Energy & Infrastructure Limited (NCLT Mumbai) 9. RG Residency Pvt Ltd (NCLT, Principal Bench, New Delhi) 10. KVIR Towers Pvt Ltd (NCLT, Principal Bench, New Delhi) 11. Garodia Chemicals Limited (NCLT Mumbai) Withdrawn: 12. Loon Land Developers Limited (NCLT New Delhi) – After admission 13. Krrish Realtech (NCLT New Delhi) – Before admission Dismissed/Rejected: 14. CHD Developers Limited (NCLT New Delhi) – Before admission 15. Kethos Tiles Private Limited (NCLT Ahmedabad) – After admission The case in question, Jaldhara Properties and Trading Pvt. Ltd. v. Sudal Industries Ltd. & Anr., addressed the issue of whether a PPIRP application under Section 54C of the Insolvency and Bankruptcy Code (IBC) should take precedence over an earlier Section 7 application, particularly when the latter was filed before the amendments introduced by the IBC (Amendment) Act, 2021. The NCLAT ruled that the earlier Section 7 application retained its priority, underscoring the importance of respecting the sequence of filings in insolvency proceedings. This decision reinforces the principle that earlier applications should not be superseded by newer ones, maintaining the integrity and consistency of the IBC process. https://lnkd.in/g4ZeBVKB
Pre-Packaged Insolvency Resolution Process in India (PPIRP)
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The Insolvency and Bankruptcy Board of India (IBBI) has once again demonstrated its unwavering commitment to enhancing the insolvency resolution ecosystem. The recently proposed amendments to Monitoring Committees under CIRP and the Grievance Redressal Mechanism highlight its focus on protecting stakeholder interests while ensuring efficiency and transparency. Key Takeaways: • Mandatory Monitoring Committees: Ensures effective oversight and balanced representation for smooth implementation of resolution plans. • Grievance Redressal Enhancements: Extended timelines and strengthened frameworks empower stakeholders, especially smaller creditors and operational claimants. • Operational Streamlining: Rationalized AFA timelines offer insolvency professionals flexibility and reduce procedural bottlenecks. IBBI’s focus on inclusivity, accountability, and statutory compliance is a testament to its efforts to build a robust insolvency framework that addresses challenges while fostering trust among stakeholders. I encourage all stakeholders to review and contribute to these forward-looking initiatives. Together, we can ensure a more resilient insolvency ecosystem. Read more and share your feedback here. Insolvency & Bankruptcy Board of India (IBBI) Incorp Restructuring Services LLP (IPE)
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