GV firms’ insolvency case: NCLAT stays formation of committee of creditors

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GV firms’ insolvency case: NCLAT stays formation of committee of creditors

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HYDERABAD: The National Company Law Appellate Tribunal (NCLAT) at Delhi stayed formation of a committee of creditors in respect of two Genome Valley firms — MN Biotechnology and MN Takshila Industries— and directed authorities to allow them to continue as going concerns and not as ones hit by corporate insolvency process.

The bench of the appellate tribunal, headed by its chairman Justice S K Mukhopadhaya, gave the interim direction while hearing a plea moved by LC Core Opportunities Fund, promoter of MN companies, against Cerestra Advisors firm and another.

The National Company Law Tribunal (NCLT) at Hyderabad had earlier admitted pleas against the two Genome Valley firms located in Turkapally and ordered corporate insolvency resolution process against them for defaulting on payments. Delhi-based Cerestra Advisors firm charged the two firms with failing to clear its dues. An appeal was preferred against the order in appellate tribunal. The bench, in its interim order, gave two weeks to both the parties to arrive at an amicable solution and posted the case to February 26 for final hearing.

The interim resolution professional appointed by NCLT should take assistance of directors of these two companies and must allow them to function as running firms. Cheques issued by these directors should be honoured by banks, if they were counter signed by IRP. Their day to day functioning should not be disturbed, the bench said.

Source- Times of India.