Can lenders call for fresh bids for a stressed asset after announcing the top buyer in the previous round of bidding under the Insolvency and Bankruptcy Code? This will be the key question for the National Company Law Tribunal in a case related to Asian Colour Coated Ltd (ACCL).
JSW Steel had emerged the top bidder for the bankrupt company with a bid of ₹1,550 crore. Even as this offer is pending final approval of the NCLT, a US-based fund Interups Inc has offered a higher price.
The resolution professional of ACCL has refused to consider the fresh proposal by the US firm despite it being much higher than that of JSW Steel, said sources.
So the question is whether the offer from Interups should be considered.
Babu Sivaprakasam, Partner, Economic Laws Practice, said it is beyond the ambit of the resolution professional or Committee of Creditors to accept a fresh bid at this stage when they have already approved a winning bidder and placed a compliant resolution plan before NCLT. Considering any fresh bids at this stage will seriously shake the confidence in the sanctity of the process laid down under the Code and will also set a bad precedent, he added.
Nadiya Sarguroh, Senior Associate, MZM Legal, however, said the COC has absolute right to reject or accept one or more resolution plan prior to approval by the Adjudicating Authority considering another resolution plan may have better feasibility and commercial viability.