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Some promoters escape tight insolvency norms

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Some promoters escape tight insolvency norms
Promoters of at least four small companies managed to pass their resolution plans before New Delhi tweaked the bankruptcy code, limiting the ability of erstwhile defaulting owners from buying back their assets at the conclusion of time-bound recovery proceedings
Synergies-Dooray, Chhaparia Industries, Sree Metaliks, and the West Bengal Essential Commodities Supply Corporation have all presented successful resolution plans approved by respective chapters of the National Company Law Tribunal (NCLT).
“The ordinance is not retrospective,” said Sandeep Parekh, founder of Finsec Law Advisors. “Those companies were fortunate enough to go through successful resolution plans under the code, but without the new amendments. The outcome could have been different under the latest ordinance subject to promoters’ eligibility.”
In absence of adequate bidders, promoters have mostly regained control in all those companies where they were resolution applicants bidding for their own assets.The first was Synergies Dooray, approved by Hyderabad NCLT. Creditors settled dues for just Rs 54 crore out of a total of about  Rs 900 crore unpaid loans in the age-old case, which was once pending before the Board for Industrial & Financial Reconstruction (BIFR).
Kolkata-based resolution professional Mamta Binani had received plans from three entities, including Synergies Castings. The group company’s plan was finally submitted to the Hyderabad NCLT, which accepted it.
There could be chances that those successful resolution cases may be challenged where the promoters are disqualified under the new ordinance,” said Babu Sivaprakasam, partner at Economic Laws Practice (ELP). “Whether those promoters were fortunate enough to regain control over their companies is to be seen.”
"The amended law suggests that even if a resolution plan is submitted for approval by promoter(s), it won't go ahead unless all the tests are passed as prescribed in the Ordinance,” said Anil Goel, founder, AAA Insolvency Professionals. “Genuine promoters should always have an edge.”
The Economioc Times, New Delhi, 27th November 2017

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