CIR - Order of Liquidation - Concern regarding auction at a ...

Insolvency and Bankruptcy

April 8, 2024

CIR - Order of Liquidation - Concern regarding auction at a price significantly lower than their fair value - The NCLAT found that the appellant's challenges were not maintainable, noting that there is no provision in the Insolvency and Bankruptcy Code (IBC) that allows a shareholder to sell assets after the initiation of liquidation proceedings. - The Appellate Tribunal clarified that reductions in the reserve price followed the guidelines set forth in the regulations, and the decision to sell the corporate debtor's assets through a slump sale after several unsuccessful auctions was a reasonable approach to maximize value. - The Tribunal criticized the appellant for their non-cooperation during the Corporate Insolvency Resolution Process (CIRP) and the liquidation process. It highlighted that such behavior contributed to the challenges faced in asset realization.

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