A Mumbai bankruptcy court has granted a 90-day extension to Lavasa Corporation in its ongoing Corporate Insolvency Resolution Process (CIRP). This decision follows the failure of the previous successful bidder to implement the resolution plan on time.
- The extension allows additional time for potential bidders.
- Lavasa Corporation’s liabilities exceed Rs 6,642 crore.
Details of the Bankruptcy Court’s Decision
The Mumbai bankruptcy court has allowed a 90-day extension for Lavasa Corporation to revive its operations, as requested by its resolution professional (RP). The National Company Law Tribunal (NCLT) mandated the restart of the CIRP after the previous successful bidder, Darwin Platform Infrastructure, failed to execute the approved resolution plan within the specified timeline. The company currently faces liabilities that exceed Rs 6,642 crore, making its revival crucial for stakeholders involved.
According to the RP, significant progress has been made in the revival efforts, including the release of crucial documents such as the Request for Resolution Plan (RFRP) and the Information Memorandum (IM). The RP indicated that engaging in constructive discussions with potential bidders is underway. “The potential resolution applicants are new entrants seeking additional time to assess the relevant information for their plans,” the RP conveyed through legal counsel.
Implications of the Extension for Stakeholders
The extension granted by the bankruptcy court is significant for various stakeholders, including lenders and investors. It allows for further exploration of viable resolution plans that could potentially mitigate the company’s overwhelming liabilities. Last September, the NCLT had previously reinitiated the resolution process while excluding certain periods from the timeline. The tribunal also reinstated Shailesh Verma as the RP, ensuring continuity in the revival efforts.
According to Ashish Pyasi, Partner at Aendri Legal, “The resolution process typically must be completed within 180 days with a possible extension of 90 days. The outer limit is set at 330 days, after which the company may face liquidation.” In this case, the tribunal’s decision to allow further extensions is contingent on the progress made during the CIRP. As such, the potential for successful revival remains a topic of keen interest among industry experts.
Future Prospects for Lavasa Corporation
The future of Lavasa Corporation hinges on the effective execution of the ongoing CIRP. Established in 2000, Lavasa was envisioned as India’s first privately developed city, encompassing 20,000 acres in Maharashtra’s Pune district. However, it has faced numerous challenges, including environmental compliance issues and delayed payments to lenders. As the company navigates its insolvency, the upcoming months will be critical in determining its fate.
Industry observers suggest that if the resolution process can yield a credible plan, Lavasa Corporation may still have a chance at revival, preventing liquidation. “The tribunal’s willingness to grant extensions indicates a focus on resolution rather than liquidation,” noted Pyasi, emphasizing the ongoing need for effective engagement with potential investors.
