Two days after the Cabinet approved amendments to the Insolvency and Bankruptcy Code (IBC) 2016, allowing homebuyers the status of financial creditors, granting them equal priority as banks and other institutional creditors while recovering dues from stressed or insolvent realty firms, Jaypee homebuyers said that as soon as the ordinance is notified, they may approach the National Company Law Tribunal (NCLT) for extending the resolution professional’s term by six months so that fresh bids may be invited and voted for by buyers, who would now hold over 67 percent voting rights under the new dispensation.
Earlier, only financial institutions were recognised as financial creditors giving them the sole power to decide the future of the company under CIRP (corporate insolvency resolution process), completely ignoring the rights of homebuyers who had contributed equal and sometimes more funding that the financial institution. The ordinance will set this anomaly right. It will provide homebuyers, a seat at the Committee of Creditors and co-drive the process of resolution of the real estate firm
“Once the ordinance is notified, we will plead before the NCLT that the resolution process be rerun. We may ask for five to six months of extension for the resolution professional who would then be called upon to revise the evaluation matrix and then ask for fresh bids that may include delay compensation provision too. We are hopeful that this time round the proposal will be agreeable as home buyers (now financial creditors) would hold more than 67 percent voting rights,” they say.
Earlier this month, a group led by Lakshdeep Investments & Finance had emerged as the highest bidder for embattled real estate firm Jaypee Infratech Ltd. The consortium of Lakshdeep, Suraksha Realty, Kyati Realtors, Virtuous Finance, Dosti Realty, Sudhir Valia, Raksha Valia and Venerate Properties bid a total of Rs 10,314 crore for Jaypee. The group had lined up Rs 3,500 crore as working capital for the completion of Jaypee’s housing projects. Lakshdeep had also filed an intervening application in an ongoing case in the Supreme Court on May 11 seeking to extend the deadline for insolvency proceedings.