Intimation regarding oral pronouncement by National Company Law Tribunal (NCLT), Mumbai Bench filed under Section 7 of the Insolvency and Bankruptcy Code, 2016
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The NCLT Mumbai Bench has orally pronounced for admission of an insolvency petition filed by Reliance Alpha Services Private Limited under Section 7 of the IBC. The Petitioner claims a financial debt of Rs. 353.79 crore (including interest) under a Loan Agreement from 2019. The written order is awaited. The company disputes the claim, stating no funds were ever disbursed under the Loan Agreement and that the Petitioner does not qualify as a financial creditor. The underlying dispute relates to a Business Transfer Agreement from 2014, which is also being contested in Bombay High Court. Prime Focus has already filed an urgent appeal before NCLAT seeking a stay of the order. The company claims its business operations continue normally with full functionality across global VFX and post-production operations.
This is a serious development as an insolvency admission could lead to a resolution process affecting shareholder value. However, the company disputes the claim and has filed for an immediate stay, with management expressing confidence in its legal position. The outcome of the appellate proceedings will be critical for investors.