Takeover of a company under close down by previous management

4WhatIsRight (Querist) 06 September 2015 This query is : Resolved
Dear Friends,
One company limited by shares has decided to close down their unit alleging they are not in a position to run the same citing various reasons.
The reasons shown by the management are not real but intentional.
False losses have been created by diversion of funds.
The company has not booked orders intentionally to show that there is no demand for their products.
The real intention of management is to dispose off the property and invest the funds for regular interest income.
The company has loan from bank against first charge on property.
The management has also created false liability towards sundry creditors from their sister concerns.
notice of close down has been served to labour union and labour commissioner for resolution.
one of my friend being from the same trade and profession is interested in running the said unit.
My friend is willing to pay all liabilities and swear affidavit to the effect that he will ensure that company runs for at least next 10 years, despite profit or loss.
Existing management is not willing to listen to his offer as their agenda is clear- to sell the assets.
How shall my friend approach in the issue?
Labour union is interested in my friend's proposal.
can he seek state's intervention in the matter?

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Guest (Expert) 06 September 2015
First Consult the Advocate of Labour Union and serve the Notice to the Company.Also you should Obtain Stay Not to dispose the assets of the Company and The Bank Loan amount to be deposited in the Court Making bank also as a Party.If you have atleast few of the Management in your Side It would be More Strong and atleast have majority of employees On your side.Consult Local Good Senior Labour side Advocate.

4WhatIsRight (Querist) 06 September 2015
Union in favour of my friend.
management after draining the company by way of diversion wants to shut shop and post settlement of labour issues expects a handsome price for property.

Fund is not an issue but will it be wise to deposit the amount in court? he can make a bank guarantee, with a condition to pay that to bank upon decision in my friends favour. or anything as you learned friend suggest.

Guest (Expert) 06 September 2015
Obtain the Stay thro Union it self and Proceed as Advised.

4WhatIsRight (Querist) 06 September 2015
thanks Narasimha Sir.

4WhatIsRight (Querist) 06 September 2015
What about shares held by previous management?
Can my friend ask the court to buy shares from previous mangement or at least issue fresh shares in my friend's name for amount he invests in company for reviving.
Management is not in favour of selling to my friend.

Guest (Expert) 06 September 2015
First Obtain the Stay by remitting the Bank's Dues In Court And Make Banker also as Party With the help and assistance of Labour Union and Make Labour union also as Party in Your Side.Consult Your Local good senior advocate.Go step by step and Gradually every thing would be sorted Out.

4WhatIsRight (Querist) 06 September 2015
thank you sir

4WhatIsRight (Querist) 08 September 2015
Thank you narasimha sir.
At least you gave me a direction to think.
Rest all learned experts vommitted their undigested learning in my other posts.
your efforts reflect the dedication to help the one in distress.
I am obliged.

Advocate/CS Sanjeev Kataria (Expert) 08 September 2015
dear, company works on democratic principles, how best the company to be run, depends upon sharelholders/members. Since, the present case is of Ltd Company. Your friend can take over the company by transfer of shares. Mind it please, atleast 05 members and 03 directors needed for ltd company. He has to arrange the Board of directors accordingly. Previous management should pass special resolutions at EGM for transfer to new management. All the assets and liabilities of the company would be transferred to new management. the company can be converted into pvt ltd also, if there is some directors/shareholders restrains.

4WhatIsRight (Querist) 09 September 2015
Thank you Sanjeev sir

Takeover of a company under close down by previous management

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