The National Company Law Tribunal (NCLT) has ordered insolvency resolution proceedings against Future Retail and rejected objection raised by Amazon, that is involved in a bitter legal fight with the debt-laden company.
The tribunal, presided by Justice PN Deshmukh and Shyam Babu Gautam, said it was admitting Bank of India's plea under Section 7 of the Insolvency and Bankruptcy Code (IBC) for the initiation of the insolvency resolution process against FRL.
Section 7 allows financial creditors to initiate insolvency resolution proceedings against defaulting companies. The Mumbai-bench of NCLT has appointed Vijay Kumar Iyer as the Interim Resolution Professional (IRP) for Future Retail Ltd (FRL). The tribunal also rejected e-commerce major Amazon's objection to BoI's petition. In April, BoI filed the petition before the tribunal after FRL defaulted paying Rs 3,495 crore under the onetime restructuring scheme. Overall, FRL has defaulted on payment of Rs 5,322.32 crore to its lenders on account of the ongoing litigations with Amazonand other related issues.
Future Group's proposed deal with Reliance that involved FRL also was opposed by Amazon. Later, the deal was called off. BoI's counsel Ravi Kadam, while filing the application for initiating the insolvency resolution proceedings, had informed that the consortium of lenders are supporting the petition and that it was necessary that the tribunal admits the plea in order to protect the assets of the company.
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