On May 16, the apex court stayed the liquidation proceedings against Jaypee Infratech while asking the promoters to deposit Rs 1,000 crore by June 15 to refund home buyers. The matter is expected to be heard on July 4. The company has so far deposited Rs 750 crore.
Lenders of Jaypee Infratech on May 9 rejected Lakshadweep Pvt Ltd’s offer to buy the bankrupt company as the bid was found too low.
“Homebuyers armed with voting rights in the committee of creditors, may now demand for almost two-third share. During the resolution plan stage, they may put forth that the amount of Rs 10,500 crore be distributed among home buyers and banks on the basis of their claims or voting percentage,” say sources.
“As far as voting is concerned, not all 25,000 buyers will be able to attend the COC. Their voting rights may be similar to the voting right of a shareholder in a listed company, that is, they may be called upon to exercise their voting right through a web portal,” say legal experts.
“Buyers may ask for a change in the evaluation matrix. The previous one was heavily in favour of banks. Once that matrix is changed and home buyers get the voting rights, home buyers may approve the resolution plan,” they say.
Buyers may have to take a haircut even under the new dispensation
Despite being accorded the status of financial creditors, both buyers and banks may end up taking a 20 to 30 percent haircut, say legal experts.
The changes to the IBC cleared by the Cabinet on Wednesday were based on the recommendations of a high-level law committee chaired by Injeti Srinivas, secretary in the ministry of corporate affairs. The committee had submitted its report ‘Report of the Insolvency Law Committee’ in the month of March.
The 14-member panel had recommended that home buyers should be treated as financial creditors owing to the unique nature of financing in real estate projects and the treatment of home buyers by the Supreme Court in ongoing cases.