Hotel Leelaventures Ltd. is a chain of high-end hotels hailed as one of India’s finest luxury hotel groups. JM Finance had preferred Insolvency Proceedings against Hotel Leelaventures before NCLT, Mumbai. The Firm successfully represented Hotel Leelaventures before NCLT, Mumbai and ensured that prior to admission of Insolvency Proceedings, the Company restructures its liability with JM Finance resulting in ultimate withdrawal of the proceedings under the Insolvency Code by JM Finance.

Hotel Leelaventures for the purposes of restructuring its debts had proposed sale of part of its assets, which was also objected by one of its minority shareholders before NCLT, Mumbai. The said petition of the Company was appropriately dealt with by the Firm to ensure that sale of assets as a part of restructuring scheme is not interjected on account of the litigation initiated by the minority shareholders. Although the final order in the said proceedings of the minority shareholding is pending, however, in the interregnum, Hotel Leelaventures has given effect to its restructuring scheme which was being strategized and handled by our firm.

The Firm recently represented the Resolution Professional in the matter of Apex Drugs Ltd. through video conferencing before NCLT, Hyderabad seeking directions against the Resolution Applicant i.e., Orbit Electro Equipment Pvt. Ltd. The matter pertained to non-adherence to the terms of the approved resolution plan by the Resolution Applicant. The Resolution Applicant requested additional time to make payment. The NCLT, Hyderabad taking note of the hardships faced by RP in maintaining the plant and machinery and delay by Resolution Applicant, directed the Resolution Applicant to pay all the costs of the period of delay within a week and posted the matter for further hearings.

The Firm was recently successful in getting insolvency proceedings against the Corporate Guarantor of Aditya Vidyut Appliances Ltd. admitted before the NCLT, Mumbai. SBI had filed Applications u/s 7 of IBC against Aditya Vidyut Appliances Ltd. (AVA), the Borrower, and Aditya Fabrication Pvt. Ltd. (AFP), the Guarantor. The petition filed against AVA was admitted on 11.09.2019, wherein in the resolution process of AVA, Resolution Plans were invited, and two plans were received. As the land on which the factory of AVA existed belonged to AFP, the Resolution Applicants proposal was premised on transferring the entire land of the factory. The Bench took up the matter through videoconferencing on 08.05.2020 wherein Ashish Pyasi, Associate Partner appeared on behalf of SBI and was able to convince the Bench that to have a proper resolution in which maximization of value for all stakeholders happens, the Section 7 Petition against AFP is required to be admitted.

The Firm acted as Lenders’ Legal Counsel to consortium of lenders comprised of REC Ltd., Power Finance Corporation Ltd. and Axis Bank Ltd. (led by REC Ltd.) with respect to restructuring of outstanding loans availed by Essar Power Transmission Company Ltd. from the foregoing lenders, in terms of Reserve Bank of India’s “Prudential Framework for Resolution of Stressed Assets” dated June 07, 2019.

The transaction included advising on aspects pertaining to reclassification of debt, issuance of secured debentures, advisory on compliance requirements pertaining to issuance of debentures, advisory on stamp duty aspects, drafting of restructuring documents including but not limited to Master Debt Restructuring Agreement, Debenture Trust Deed, Security Document, Inter-Creditor Agreement and other financing documents. Further, the Firm advised the Lenders/Borrower with respect to stamp duty implications and registration aspects pertaining to the transaction instruments.

The Firm successfully safeguarded the contingent right of Indian Renewable Energy Development Agency Ltd. in the resolution process of VBC Industries Ltd. (under IBC), wherein IREDA had granted term loan to M/s Orissa Power Consortium Ltd. (OPCL) which is a subsidiary of VBC industries. The said loan was secured by way of mortgage over the property of VBC along with the pledge of shares to the extent of 40.57%, as held by VBC in OPCL. During the resolution process of VBC, the Resolution Plan as approved by CoC proposed cessation of mortgage and extinction of the pledge of shares.

The claim of IREDA as financial creditor of VBC was rejected initially by the NCLT. However, in an appeal as preferred before NCLAT the contingent right of IREDA was recognized and the same was directed to be brought to the notice of Resolution Applicant.

After representing IREDA before NCLAT an application was filed by Dhir & Dhir Associates before the National Company Law Tribunal, Hyderabad Bench (NCLT) showcasing the contingent right of IREDA, the said Application was heard on urgent basis via video conferencing and it clarified that IREDA would qualify to be a ‘secured creditor’ and that the Resolution Plan submitted by the Resolution Applicant cannot take away the mortgage right of IREDA without following the process as recognized in law and directed Resolution Applicant to modify the Resolution Plan within two weeks validating that the mortgage as well as pledge of shares will continue till IREDA is paid in full by OPCL.