Future Retail RP files for liquidation before Mumbai bench of NCLT

Future Retail Limited's resolution professional (RP) has approached the Mumbai bench of the National Company Law Tribunal to seek initiation of liquidity proceedings of the company, a regulatory filing said. 

It noted that the resolution plan submitted by Space Mantra has not been approved by the Committee of Creditors (CoC) of Future Retail. The application was filed under Section 33 of the Insolvency and Bankruptcy Code (IBC), the regulatory update said. 

As per Section 33 of IBC, the CoC may decide to liquidate the corporate debtor at any time after its constitution and before the confirmation of the resolution plan. 
 
SpaceMantra, a provider of an online marketplace for the construction and interior industry, was the only bidder for FRL through the insolvency process.

Other than Space Mantra, the other five companies that have placed their bids were Pinnacle Air, Palgun Tech LLC, Lehar Solutions, Goodwill Furniture and Sarvabhishta E-waste Management. 

Space Mantra had placed a bid of Rs 550 crore.

“…the resolution professional has filed an application before the National Company Law Tribunal (NCLT), Mumbai bench, for initiation of liquidation of FRL under Section 33 of the Insolvency and Bankruptcy Code, 2016 on 9 November," the company said in a statement to the stock exchanges.

Space Mantra's plan was rejected in the vote on September 30, with only 42 per cent support, falling below the necessary 66 per cent for approval. According to regulations of the Insolvency and Bankruptcy Board of India (IBBI), the RP is required to submit an application to the NCLT in accordance with the voting results.

The Corporate Insolvency Resolution Process (CIRP) against Future Retail by its lender Bank of India (BOI) following loan defaults last year.

Under the Insolvency & Bankruptcy Code, EoI was invited from prospective bidders on October 4, 2022.

In July 2022, the National Company Law Tribunal (NCLT) admitted an insolvency petition filed by the Bank of India against Future Retail. Vijay Kumar V Iyer was appointed as the resolution professional, who initiated the bankruptcy proceedings of the debt-laden retailer.

The Mumbai bench of NCLT in July admitted the BOI’s petition under Section 7 of the Insolvency and Bankruptcy Code to start insolvency proceedings against Future Retail and also appointed an interim resolution professional.

In August 2022, Future Retail received a letter from BOI seeking representation/submissions from the company, Kishore Biyani (promoter/director/guarantor) and Rakesh Biyani (promoter/ erstwhile director) on forensic audit report dated August 9 which was submitted to BOI by BDO India LLP. 

BDO India LLP is the forensic auditor appointed by BOI.

FRL owes its creditors led by Bank of India over Rs 19,000 crore, according to claims submitted and approved under the insolvency process up to August 24.

Lenders include Bank of New York Mellon, Bank of Baroda, Union Bank of India, and Central Bank of India.