TMI BlogMaximizing Value in Insolvency: NCLAT Upholds CoC's Right to Negotiate Post-Challenge MechanismX X X X Extracts X X X X X X X X Extracts X X X X ..... CIPAL BENCH , NEW DELHI The National Company Law Appellate Tribunal (NCLAT) recently delivered a pivotal judgment regarding the powers of the Committee of Creditors (CoC) in the corporate insolvency resolution process, particularly focusing on their authority to negotiate or revise resolution plans even after the conclusion of a challenge mechanism under Regulation 39(1A)(b) of the CIRP Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Authority of Appellants : The NCLAT confirmed that the appellants, being part of the CoC and having substantial vote share, possessed the requisite legal standing to challenge the Adjudicating Authority's order, thus establishing the appeals as competent. CoC's Rights for Further Negotiation : The Tribunal clarified that the CoC retains the right to negotiate with resolution applicants o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The commercial wisdom of the CoC, as per the Tribunal, remains paramount and unchallenged. Directive to CoC and Extension of Time : The NCLAT directed that the CoC may proceed to conduct a Revised Challenge Mechanism or engage in further negotiations with resolution applicants, as per clauses of the Request for Resolution Plan (RFRP). To facilitate this, an additional exclusion period of 30 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions, including the right to negotiate with resolution applicants post-challenge mechanism. This autonomy is pivotal for ensuring the maximization of value for the corporate debtor, aligning with the core objectives of the Insolvency and Bankruptcy Code (IBC). The judgment also highlighted the Tribunal's interpretative stance on regulatory provisions, preferring an understanding that fosters ..... X X X X Extracts X X X X X X X X Extracts X X X X
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