The bankruptcy court has allowed a petition filed by an operational creditor of Bombay Rayon Fashions Ltd. (BRFL) to admit the company for the corporate insolvency resolution process (CIRP).
The court has appointed Santanu T Ray of AAA Insolvency Professionals as its resolution professional.
Bombay Rayon, in a filing with stock exchanges, said Prashant Agrawal, a member of its suspended board, has decided to appeal the ruling at the appellate tribunal.
The company had reported a net sale of Rs. 108.77 crore and loss of about Rs. 300 crore in fiscal 2021.
The Mumbai bench of the National Company Law Tribunal (NCLT) admitted the plea filed by Vikash Parasprampuria of Chiranjilal Yarn Traders against the BRFL.
The tribunal has now restrained Bombay Rayon executives from transferring, encumbering, alienating or disposing of the company’s assets.
“Corporate debtor (BRFL) had time and again by its letter, invoices and by making part payment acknowledged its liability. Therefore, the petition made by the creditor is complete in all respects as required by law,” said an NCLT division bench of members Kishore Vemulapalli and Rajesh Sharma in its order. “Therefore, we find that it is a fit case for initiation of CIRP.”
A public announcement has been made and claims are invited from creditors.
It is worth mentioning here that since the inception of the Insolvency & Bankruptcy Code, several textile and apparel companies— like Digjam, Alok Industries, Reid & Taylor India, S Kumars Nationwide, Mandhana Industries and Provogue — have been referred for debt resolution.
