Real Estate Developer Avails Resolution Professional Services

Corporate Debtor (CD) was incorporated under the provisions of the Companies Act, 1956 having its registered office in Mumbai, Maharashtra, India. It was incorporated in the year 2010 with the main object clause is to act as builders and developers of real estate projects.

As per Property Record, the property is jointly held by the Corporate Debtor along with the JV Partner in the ratio of 50:50 whereas, the actual Corporate Debtor holds 60% share of the land and the balance 40% share of the land is held by JV Partner.

On the default of loan repayment by Corporate Debtor, one of the Secured Financial Creditors / Lenders (SFC) filed an application with the Hon’ble National Company Law Tribunal, Mumbai Bench (AA) under Section 7 of the Insolvency Bankruptcy Code 2016 and the Hon’ble National Company Law Tribunal, Mumbai Bench initiated the Company’s Corporate Insolvency Resolution Process (CIRP) with an order in September 2019.

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Industry Focus

Timeline

What services did the client engage InCorp for?

• Secured Financial Creditor (SFC) sought Resolution Professional (RP) services to act as an RP for the Corporate Debtor.
• The Secured Financial Creditor wanted to find the best resolution, which would result in ultimate recovery of the Outstanding Debt owed by the Corporate Debtor.

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What was the client’s long-term vision?

• Secured Financial Creditor (SFC) wanted maximum recovery of the outstanding debt owed by the Corporate Debtor to it.

How did InCorp turn the client’s Vision into Reality

Client’s Main Challenges	With InCorp
The JV (Joint venture) partner tried to stall the CRIP of the CD by filing multiple applications before the NCLT, issuing legal notice to RP.	RP replied to all the applications filled by the JV partner to stall the CRIP of the CD and also replied to the legal notices sent to the NCLT.
Difficulty in finding Prospective Resolution Applicants (PRAs) and convince them to file Expression of Interest (EOIs) in the wake of multiple litigation filed by the JV Partner of the CD.	RP provided necessary information / explanations to various queries received from Prospective Resolution Applicants (PRAs).RP also verified all the Expression of Interest (EOIs) received from PRAs and selected eligible PRAs. RP replied to various litigation initiated by the JV Partner of the CD.
Difficulty in convincing the PRAs to take over the CD to submit the Resolution Plan as a going concern and not to take over the assets of the CD. Lastly balancing the expectations of PRA and the SFCs in terms of settlement amount, terms and conditions of settlement etc.	RP successfully convinced PRA to submit the Resolution Plan consisting of part payment upfront of dues and partly by offer of share in the constructed area. RP successfully managed to bring a Resolution Plan covering up to 74% of the admitted claim of SFCs. RP also managed to approve the Resolution Plan with 100% voting power of the Committee of Creditors (COC) of the CD.
The last challenge faced by RP was to complete the CIRP of CD within the stipulated time frame.	RP filed various petitions before AA relating to exclusion of period from CIRP, extension of CIRP period and also for exclusion of COVID Period from CIRP.