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HC allows dissolution plea as Company had no further assets to realize and no claim exists
In the instant case, the winding-up order was passed against the respondent company, and an Official Liquidator (OL) was appointed. The OL filed an instant application praying to dissolve the respondent and to discharge OL as its liquidator.
The record showed that ex-directors of the company (in liquidation) had filed a Statement of Affairs and undertook to appear before OL as and when required.
As per the Statement of Affairs filed by the ex-director of the company (in liquidation), it appeared that the company (in liquidation) had one secured creditor, besides a preferential creditor, which was Central Sales Tax and an amount of Rs. 24 lacs was repaid to the secured creditor. Such payment was made by one of the ex-directors by way of the sale of his personal assets.
Moreover, the company (in liquidation) also had five unsecured creditors. However, at present, the company (in liquidation) had no assets, either movable or immovable, from which any money could be realised and the funds position of the company as on 8-5-2024 was stated to be Rs. (-) 22 thousand.
Further, despite the requisite publication of advertisements, OL received no claims in respect of the company (in liquidation). Therefore, the liquidation process had been carried out in full, and the affairs of the company (in liquidation) had been wound up.
The High Court held that no fruitful purpose would be served in keeping winding up proceedings pending, and thus, the instant application filed under Section 481 of the Companies Act, 1956 for dissolution of the company (in liquidation) was to be allowed, and OL was to be discharged as its liquidator.
SEBI directs participants’ contribution to ‘Core Settlement Guarantee Fund’ of Limited Purpose Clearing Corporation
Earlier, SEBI prescribed guidelines for contributions to the Core Settlement Guarantee Fund (SGF) of Limited Purpose Clearing Corporation (LPCC) and its default waterfall. SEBI now directs the contribution of participants who desire direct participation, not through a clearing member, to SGF, subject to a certain condition.
The condition states that no exposure shall be available on the Core SGF contribution of any participant (exposure-free collateral of participants available with CC can be considered towards Core SGF contribution of participants) and that required contributions of individual participants must be pro-rata based on the risk they bring to the system.
Further, LPCC must have the flexibility to collect primary contributions, including the flexibility to collect the participant's primary contribution upfront or staggered over a period of time.
If LPCC does not seek contribution from participants or seeks staggered contribution, the remaining balance must be met by LPCC to ensure the adequacy of the total Core SGF corpus at all times. Such LPCC contribution must be available to LPCC for withdrawal as and when further contributions from participants are collected or received.
IBBI proposes one valuation estimate for companies up to a certain asset size and for MSME companies
The IBBI has issued a discussion paper on proposed amendments to the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The various proposals include
(a) requiring a registered valuer to submit a valuation report for the corporate debtor as a whole,
(b) providing one valuation estimate for companies up to a certain asset size and for MSME companies,
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(c) allowing voting by an authorised representative before appointment by the adjudicating authority and
(d) releasing of guarantees in the resolution plan. Comments may be submitted electronically by July 10, 2024
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