NCLT initiates insolvency proceedings against CCD's parent firm

The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Cafe Coffee Day's parent company as per the report by Bar and Bench.

The NCLT Bengaluru recently admitted a petition against Coffee Day Enterprises Ltd (CDEL), filed by IDBI Trusteeship Services Ltd (IDBITSL)-one of the financial creditors of the coffee company.

The lender has accused CDEL over an alleged default of Rs 228.45 crore.

The tribunal court has appointed Ashish Chhawchhharia as the interim resolution professional (IRP) and directed the IDBI Trusteeship Services to submit Rs 2 lakh to meet the expenses.

The IDBITSL filed the insolvency petition in September 2023. As per the petition, the CDEL and the financial creditor entered into a Debenture Trust Deed in 2019. The IDBITSL agreed to subscribe to non-convertible debentures worth Rs 200 crore, and the coffee company agreed to pay the amount in lieu of the subscription money raises, the Bar and Bench report mentioned.

Previously, IndusInd Bank had filed a petition against CDEL in 2023 but both parties reached a settlement.

As per the Bar and Bench, advocate Srinivasa Raghavan, Sankeerth V and Krishnavarna of Keystone Partners appeared for the financial creditor. Advocate Chithra Nirmala appeared for CDEL.