The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) on Thursday set aside insolvency proceedings against Coffee Day Enterprises Ltd (CDEL), the parent company of Café Coffee Day.
A copy of the order is awaited.
A bench comprising Justice Sharad Kumar Sharma and technical member Jatindranath Swain set aside an order of the National Company Law Tribunal (NCLT) that had admitted the firm into insolvency proceedings.
The NCLAT was hearing an appeal filed by a director of CDEL’s suspended board.
The insolvency proceedings against CDEL began when the Bengaluru bench of the NCLT admitted a plea filed by IDBI Trusteeship Services Ltd (IDBITSL) on August 8, 2024. The plea cited a default of Rs 228.45 crore, leading to the appointment of an interim resolution professional to manage the operations of the financially troubled company.
Following this, CDEL’s suspended board challenged the NCLT’s order before the NCLAT, which granted a stay on the insolvency process on August 14, 2024.
However, IDBITSL took the matter to the Supreme Court, which ruled on January 31, 2025, that the NCLAT must dispose of the pending appeal before February 21, 2025.
The Supreme Court had also made it clear that "in the event the appeal is not disposed of by then, the impugned order passed by the Appellate Tribunal shall stand vacated automatically."
CDEL is the flagship company of the Coffee Day Group, which operates the Café Coffee Day chain. Apart from running the popular café brand, CDEL also owns and operates a resort, provides consultancy services, and is involved in the sale and purchase of coffee beans.
The financial troubles for CDEL escalated after the demise of its founder and chairman, V G Siddhartha, in July 2019. Since then, the company has been working on reducing its debts through asset resolutions and has significantly downsized its operations to manage the financial crisis.
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