21 June 2019: The corporate insolvency resolution process (CIRP) of cash-strapped Jaypee Infratech (JIL) has hit a roadblock with the homebuyers divided in two groups — one in favour of considering Manoj Gaur and Adani group’s resolution plans, while the other wants to explore legal options for possession of their flats.
Sources said JIL’s committee of creditors (CoC) met on Thursday after lenders requested for the meeting after the June 10 order of the National Company Law Appellate Tribunal (NCLAT), where it said that lenders can vote against NBCC’s revised bid.
“The meeting was a waste as there was no consensus among homebuyers, who are divided in two groups. Today’s meeting was to explore the way forward after NBCC’s revised bid got rejected. Lenders and a section of homebuyers want to consider the revised bids of Manoj Gaur and Adani group,” said one of the sources.
Another source said some lenders and homebuyers favoured considering section 12A of the Insolvency and Bankruptcy Code (IBC) and allow CoC to discuss the revised bid of Gaur. A section of lenders also said there is no harm in considering Adani group’s expression of interest (EoI), too, as it could help to fast track the CIRP.
“However, the talks were not conclusive as the CoC wants to wait for July 1 for the hearing on prime lender, IDBI bank’s plea in the NCLAT. After this hearing the CoC will meet again most likely on July 2 or within the week,” he added.
Section 12A of the IBC allows corporate debtor another chance to make good on the default and retain control over the firm even after the case is admitted to National Company Law Tribunal (NCLT).
Another source who works for one of the lenders said: “We feel that Gaur’s resolution plan should also be considered. Since NBCC’s bid is not accepted, the issue has again gone back to square one. Also with the homebuyers divided, there is confusion.”
There is a clear division in the CoC with lenders on one side supported by one group of homebuyers who want to consider Gaur and Adani group’s bids. This group is of the view that their authorised representative Kuldeep Verma is supporting the other group of homebuyers who want to explore legal option.
“Lenders feel that since most of the options have been exhausted, there is no other way to consider Gaur’s offer rather than again go for another CIRP, which means more delay,” he added.
NBCC’s revised resolution plan was defeated as the company was adamant that it will keep the unsold inventory, to which the lenders did not agree, said one of the sources.