Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
The insolvency proceedings against Asian Hotels (West), operating Mumbai's Hyatt Regency, have been overturned by the National Company Law Appellate Tribunal (NCLAT) on Tuesday. The tribunal also approved the proposal presented by the former promoters and directors under Section 12A of the Insolvency & Bankruptcy Code.
NCLAT criticised the lenders' decision, deeming it "arbitrary" for not accepting the 12A Proposal, which offered complete repayment of debts to financial and other creditors. The tribunal accepted the revised proposal submitted by the former promoters, closing the Corporate Insolvency Resolution Process (CIRP) for the company.
According to NCLAT's order, the insolvency proceedings initiated by the New Delhi Bench of the National Company Law Tribunal (NCLT) on September 16, 2022, based on a Section 7 application, have been set aside.
The initial borrowing by Asian Hotels (West) was from YES Bank, later transferred to JM Financial Asset Reconstruction, which was subsequently assigned to UV Asset Reconstruction Company Ltd (UVARCL).
The tribunal criticised UVARCL, highlighting discrepancies in the claim amount admitted during CIRP, stating a proposed full payment of Rs 295 crore under the 12A proposal while UVARCL proposed a total payment of Rs 329.14 crore.
NCLAT questioned UVARCL's intentions, suggesting a potential attempt to acquire the prized asset of the corporate debtor, Hyatt Regency, Mumbai, and hand it over to a Prospective Resolution Applicant known to UVARCL alone.
Furthermore, the 12A proposal by the former promoters aimed to clear dues of all creditors, including operational creditors, employees, workmen, and government dues. However, the CoC's decision to reject the 12A proposal was deemed arbitrary and unsustainable by NCLAT.
The tribunal observed that Asian Hotels (West) had availed term loans totaling Rs 200 crore from YES Bank, meeting its financial obligations until March 31, 2021. The hotel business suffered significantly due to the Covid-19 lockdown, prompting the company to seek additional credit lines through the Emergency Credit Lines Guarantee Scheme (ECLGS). Despite YES Bank issuing a sanction letter in May 2021, the sanctioned amount was not released due to unfulfilled corporate debtor conditions.
In conclusion, the NCLAT's decision to overturn the insolvency proceedings signifies a significant turn in the company's fate. The rejection of the 12A proposal by the CoC has been deemed arbitrary, leading to the tribunal's ruling in favour of the former promoters' proposal. This case sheds light on the complexities of insolvency processes and creditor decisions, highlighting the challenges faced by companies amid economic uncertainties and unforeseen adversities like the Covid-19 pandemic.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
We use cookies to give you the best possible service while using our website, please click accept and carry on browsing if you're happy with this. For more information see our Privacy Policy.
Okay, Got it!This disclaimer ("Disclaimer") is applicable to the entire Site. Upon entering the Site it is recommended that you immediately read the Terms and Conditions and Privacy Policy listed therein. Your continued usage of this Site will indicate your unconditional acceptance of the said Terms and Conditions and Privacy Policy. You hereby agree that Propscience reserves the right to modify at any time, the Terms and Conditions and Privacy Policy governing this Site without prior notification. Your usage of the Site implies that you will be bound by any such modification. You agree and acknowledge that it is your responsibility to periodically visit the Site and stay updated with the Terms and Conditions and Privacy Policy of the Website.
The information contained in this Site has been provided by Propscience for information purposes only. This information does not constitute legal, professional or commercial advice. Communication, content and material within the Site may include photographs and conceptual representations of projects under development. All computer-generated images shown on the Site are only indicative of actual designs and are sourced from third party sites.
The information on this Site may contain certain technical inaccuracies and typographical errors. Any errors or omissions brought to the attention of Propscience will be corrected as soon as possible. The content of this Site is being constantly modified to meet the terms, stipulations and recommendations of the Real Estate Regulation Act, 2016 ("RERA") and rules made thereunder and may vary from the content available as of date. All content may be updated from time to time and may at times be out of date. Propscience accepts no responsibility for keeping the information in this website up to date or any liability whatsoever for any failure to do so.
While every care has been taken to ensure that the content is useful, reliable and accurate, all content and information on the Site is provided on an "as is" and "as available" basis. Propscience does not accept any responsibility or liability with regard to the content, accuracy, legality and reliability of the information provided herein, or, for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information. No information given under this Site creates a warranty or expands the scope of any warranty that cannot be disclaimed under applicable law.
This Site provides links to other websites owned by third parties. Any reference or mention to third party websites, projects or services is for purely informational purposes only. This information does not constitute either an endorsement or a recommendation. Propscience accepts no responsibility for the content, reliability and information provided on these third-party websites. Propscience will not be held liable for any personal information of data collected by these third parties or for any virus or destructive properties that may be present on these third-party sites.
Your use of the Site is solely at your own risk. You agree and acknowledge that you are solely responsible for any action you take based upon this content and that Propscience is not liable for the same. All details regarding a project/property provided on this Site are updated on the basis of information available from the respective developers/owners/promoters. All such information will not be construed as an advertisement. To find out more about a project / development, please register/contact us to visit the site you are interested in. All decisions taken by you in this regard will be taken independently and Propscience will not be liable for any such loss in connection with the same. This Site is for guidance only. Your use of this Site - including any suggestions set out in the Site and or any use of the resources available on this Site, do not create any professional - client relationship between you and Propscience. Propscience cannot accept you as a client until certain formalities and requirements are met.
We use cookies to give you the best possible service while using our website, please accept it and continue browsing if you're happy with this. For more information see our Privacy Policy