NCLT orders liquidation of Tulip Hotels in absence of a resolution plan

0
Tulip Hotels

The National Company Law Tribunal (NCLT), Mumbai Bench, has ordered the liquidation of Tulip Hotels Pvt. Ltd., marking the latest development in the company’s insolvency process. The order came after the Corporate Insolvency Resolution Process (CIRP) failed to produce a resolution plan within the stipulated timeframe.

Resolution Professional Gaurav Ashok Adukia sought liquidation under Section 33(1) of the Insolvency and Bankruptcy Code (IBC), citing an absence of viable resolution proposals. Despite deliberations, the Committee of Creditors (CoC) could not reach a consensus to extend the CIRP.  JC Flowers, a key stakeholder with 70.83% voting rights, supported liquidation.

The insolvency application against Tulip Hotels was initially filed by Yes Bank, which subsequently assigned the loan to JC Flowers. The insolvency petition was with respect to Rs 900 crore default by Tulip Hotels.

According to the submission made by the financial creditor (JC Flowers Asset Reconstructions), the corporate debtor defaulted payment under two guarantees aggregating to Rs.900 crore in its capacity as a guarantor guaranteeing repayment of the loans disbursed by the petitioner to Cox and Kings Limited and Ezeego One Travel & Tours Limited, both companies promoted by Ajit Kerkar and family.

Both Cox and King and Ezeego committed severe breach and default in repayment of financial debt which included principal amount, interest and other charges, forcing the financial creditor to invoke the guarantees and ask Tulip Hotels to make the payment of Rs 900 crore.

“Having considered the submissions and on perusal of averments made in the Interlocutory Application by JCFARPL holding 70.83% voting share in CoC, this Bench is satisfied and is of the considered opinion that the present Interlocutory Application is in consonance with Section 33(2) of the Code. Accordingly, this Authority has left with no option except to pass an order for Liquidation of the Corporate Debtor Company in the manner laid down in Chapter III of the Code considering the fact there is no Resolution Plan for consideration and CoC does not foresee any possibility of getting Plans for the Corporate Debtor,” said the Tribunal while passing the order. 

Also See: Tulip Hotels in insolvency for failing to pay Rs 900 cr to Yes Bank

Leave a Reply

Your email address will not be published. Required fields are marked *