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CS Professional · Insolvency and Bankruptcy - Law and Practice · Group Insolvency

In the Videocon Industries matter, the NCLAT and the Supreme Court dealt with the resolution of a group of companies. Which feature best describes the Supreme Court's 2021 stance on the consolidation of the group's CIRPs?

In the Videocon matter, the Supreme Court did not disturb the consolidated resolution of the group companies. This is read as a fact-specific outcome based on the group's integration, not as a general rule of substantive consolidation under the Code.

  1. AIt held that Section 7 prohibits any joint proceedings of group companies
  2. BIt left consolidation of group entities to the discretion of the resolution professional alone
  3. CIt directed that every group company must be liquidated together
  4. DIt accepted the consolidated resolution of the Videocon group companies, treating it as a one-time exercise on the unusual factsCorrect

Explanation

The Tribunal had approved a consolidated approach in view of the integration of the group entities, and the Supreme Court did not interfere with the consolidation in the case. The result is read as fact-specific and not as a general doctrine. The other options misstate what the Court did.

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