NCLAT to hear pleas challenging Birla Tyres resolution plan next week

livemint.com:

. One of the pleas, filed by HDFC Bank challenging the jointresolution plan of Himadri Speciality Chemical Ltd and the Dalmia Bharat group to acquire Birla Tyres, will be heard on 23 November. The other petition, involving Kesoram Industries Ltd, the parent company of Birla Tyres, contesting the rejection of its claims as a financial creditor in the insolvency process, will be heard on 24 November. Last month, the Kolkata bench of the National Company Law Tribunal (NCLT) approved the resolution plan jointly submitted by Himadri Speciality Chemical and Dalmia Bharat Refractories to acquire Birla Tyres under the Corporate Insolvency Resolution Process (CIRP).

The approved consortium proposed a partial repayment of ₹1,100 crore towards the bank loans of the BK Birla group company. These pleas assume significance as there is still no clarity on the business revival of the company despite the acquisition by Dalmia Bharat Group. The fate of hundreds of Birla Tryres’s workers hangs in balance as a result of the alleged unilateral rejection of their claims by the resolution professional in the approved resolution plan.

These workers have also moved NCLT Kolkata and various other forums seeking payment of dues owed to them by the company. This complicates the case further since workers' dues hold high priority in terms of the IBC waterfall mechanism. If the accepted dues are higher, it could lead to an escalation in acquisition costs for Dalmia Bharat Group.