21-Mar-2023 Pharmaceutical MSME Unit Rehabilitation under IBC

OVERVIEW:

The pharmaceutical unit (CD) was run by promoters having more than 30 years’ experience. The promoters had a big dream of expansion and exporting their products in Europe and Russia by procuring WHO’s guidelines compliance and approval for their unit.

PROBLEM:

The promoters were already exporting their products in African Countries. Due to huge devaluation of currency in African countries where promoters had huge receivables and inventory, the CD was in big trouble since it had taken a big line of credit from their bankers. 

The bankers had declared the unit to NPA and sold it to an Assets Reconstruction Company (ARC). The ARC had dragged the CD for insolvency.

SOLUTION:

The promoters approached Hemant Mehta Insolvency Professional (IP) and partner of APMH & Associates LLP to consult and resolve the matter in such a way so that they can regain the control of the unit. The resolution professional had obtained plans from promoter's relatives, being eligible under MSME norms to bid and take part in the resolution process. 

Being a MSME unit, normally outsiders and not taking part in bidding process since they believe that MSME units are peculiar and it can be better run by promoters only. The IP helped the promoters and their relatives to regain the control of the unit with due legal process.