Jaypee Infratech: Insolvency process hangs in limbo with division among buyers

Photo: Samrat Roy
Posted: Jun 21, 2019

The corporate insolvency resolution process (CIRP) of debt-ridden Jaypee Infratech has gone hanging in limbo as home buyers have divided in two groups – one group wants the consideration of Manoj Gaur and Adani Group's resolution plans while the other wants to take legal route for getting possession of their flats.

As per sources, the committee of creditors (CoC) had met on Thursday but it failed to bear any fruit as home buyers were divided and no consensus was reached. The meeting was convened to decide on the future course of action after rejection of NBCC's revised bid. 

The lenders had 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.

Another source said that some home buyers were in favour of considering Section 12A of the Insolvency and Bankruptcy Code (IBC) and allow CoC to discuss the revised bid of Gaur. 

Another group said that there is no problem in considering the Adani group’s expression of interest (EoI) as it would speed up the insolvency resolution problem. 

“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.

As per the Section 12A of the IBC, corporate debtor can get another chance to make good on the default and regain control of the firm despite the case being admitted at the National Company Law Tribunal (NCLT). 

As many as 13 banks and over 23,000 home buyers have voting rights in the CoC. Buyers have nearly 60 per cent votes and the rest lies with the bankers. For the bid to be approved, 66 per cent voters should be in favour of the deal.

In its revised offer, NBCC had proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors.

TAGS: Jaypee Infratech case / Insolvency proceedings of JIL / CoC meeting in JIL case / Buyers on JIL case / Noida news / Greater Noida news