NCLT orders liquidation of Future Retail

The National Company Law Tribunal (NCLT) at Mumbai on Monday ordered the liquidation of retail chain, Future Retail Limited (FRL) [Bank of India v. Future Retail Limited]..A coram comprising judicial member Kuldip Kumar Kareer and technical member Anil Raj Chellan passed the order after noting that the maximum period for the corporate insolvency resolution process (CIRP) had expired."Looking at the application and averments made therein, it is evident that the maximum period of the CIRP has expired and no Resolution Plan has been approved by the CoC. We are of the considered opinion that this is a fit case for liquidation. Therefore, we hereby order the liquidation of the Corporate Debtor," the July 29 order said. The order was passed on an application for liquidation by Vijaykumar Iyer, who had been appointed as the resolution professional in July 2022 when the CIRP for Future Retail commenced. The tribunal noted that only one resolution plan was considered by the committee of creditors (CoC) constituted to oversee the CIRP for Future Retail. However, this resolution plan failed to pass muster after it was put to vote before the CoC. Therefore, on October 26, 2023, the CoC decided to liquidate Future Retail. Accordingly, a liquidation application was filed before the NCLT which has now allowed the same. The NCLT also appointed Sanjay Gupta as the liquidator."To maximise the value of the Corporate Debtor (FRL), the Liquidator shall endeavour the sale of the Corporate Debtor as a going concern under Regulation 32A clause (e) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016," the NCLT said. .Future Retail had earlier entered into a framework agreement with the Bank of India for availing a credit facility from a consortium of lenders including Axis Bank and Andhra Bank.Subsequently, FRL failed to honour the agreement resulting in the Bank of India filing a CIRP application under Section 7 of the Insolvency Bankruptcy Code, 2016 (IBC).The insolvency proceedings were initiated in the backdrop of a failed deal between Reliance and FRL worth ₹24,713, crores which was opposed by secured creditors including Amazon..Rishabh Jaisani (Counsel) and Harit Lakhani (Associate) from Shardul Amarchand Mangldas & Co. appeared on behalf of the Resolution Professional of Future Retail Limited. Other Lawyers from SAM, who were involved in the case, included, Anoop Rawat (Partner), Saurav Panda (Partner), Sagar Dhawan (Partner), Mohana Nijhawan (Senior Associate) and Maanvi Jain (Associate)..Amazon v Future Group: NCLT orders insolvency process against Future Retail.[Read Order]