According to the latest updates in insolvency case of Essar Steel, the National Company Law Tribunal (NCLT) has today said that it would hear all the pleas filed by the creditors’ committee and aggrieved parties in the Essar Steel insolvency case on 10 December citing inadequate bench strength.
After Essar Steel failed to repay bank loans running into thousands of crore, lenders dragged the company under Insolvency and Bankruptcy Code last year. The case has been going on over 400 days going beyond the stipulated 270-day timeline amid multiple legal challenges.
When finally the CoC (Committee of Creditors) approved the resolution plan worth INR42,000 crore of Arcelor Mittal last month in less than 24 hours, the company’s owners Ruias offered to pay INR 54,000 crore to creditors to settle their claims, making a last-ditch attempt to retain it and allowing it to exit from a bankruptcy process.
The CoC has argued that the unofficial offer made by the Ruias to withdraw Essar Steel from insolvency proceedings was not maintainable and that their petition must be dismissed.
At the beginning of the month, ArcelorMittal’s expected acquisition of Essar Steel faced a further challenge over unpaid dues at GPI Textiles, a company promoted by LN Mittal’s brothers Pramod and Vinod Mittal. The Insolvency and Bankruptcy Code (IBC) stipulates that promoters of defaulting companies and persons “connected” to them are barred from participating in bids for stressed assets.
Apart from this a group of 30 vendors, who had supplied goods and services to Essar, came together to petition the NCLT’s Ahmedabad chapter asking for their dues worth more than INR 600 crore. These dues are not promised to be repaid fully in the ArcelorMittal plan, they alleged.
The operational creditors plea was not heard by the court today. On account of the full bench not being present, the case has now been adjourned until December 10.
Last week, Standard Chartered Bank, the third-largest secured financial creditor of Essar Steel, also filed an application before the bankruptcy court alleging that the resolution professional and Essar’s committee of creditors (CoC) approved a resolution plan that does not comply with the Insolvency and Bankruptcy Code.
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