After removing key bankruptcy officials chosen by the firm that brought itself before the National firm Law Tribunal (NCLT), lenders to Go First Airlines are attempting to assume full control of the airline’s resolution process there.
The committee of creditors (CoC) replaced the company’s appointed interim resolution professional (IRP), process advisor, and legal agency at the first meeting held on Friday to demonstrate their intent to manage the largest voluntary bankruptcy-protection case in the nation since the Insolvency and Bankruptcy Code (IBC) took effect.
A&M will be replaced as the process advisor by EY, and J Sagar Associates will be hired as the CoC’s legal counsel. The CoC will file for additional amendments before the NCLT by Tuesday.
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Key Bankruptcy officials replaced:
Due to competition from companies like Shroff & Co, Luthra & Luthra, and Cyril Amarchand Mangaldas, Trilegal, IRP’s legal counsel, will also be replaced. “Whether correctly or incorrectly, lenders had some reservations about sticking with the support services the company had already chosen. It was decided that it would be better to alter everyone since they didn’t want to risk issues being raised later, according to a person familiar with the situation.
Any key bankruptcy officials or company that has even remotely assisted the promoters or management in the past is being eliminated by the CoC in order to minimise conflicts of interest.
According to a second person familiar with the activity, “all firms had been given the opportunity to offer their expertise, but firms associated with the company anytime previously were at a disadvantage.” “Khaitan & Co, which had submitted the petition on the company’s behalf, or maybe a Shardul Amarchand Mangaldas, had previously interacted with the business. Lenders want to make sure that there isn’t the slightest chance of a conflict of interest.
Go First owes more than 6,500 crore to creditors, who are represented by the Central Bank of India. 1,987 crore in unpaid loans, including 650 crore in post-Covid emergency lines, are held by the Central Bank. Bank of Baroda (1,430 crore) and Deutsche Bank (1,320 crore) are two other significant lenders. The German lender mostly provided loans in foreign currencies. Lenders want to make sure that they completely manage the insolvency process in order to optimize value after being taken aback by the company’s sudden filing for voluntary insolvency, which grants it a moratorium on loan repayments.
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