Insolvency Drama Unfolds: Cafe Coffee Day's Corporate Turmoil Resurfaces

The insolvency process against Coffee Day Enterprises Ltd has resumed as NCLAT could not issue a decision by the Supreme Court's deadline. The reinstatement of the corporate insolvency resolution process follows an appeal on the matter previously stayed by NCLAT, now challenged by IDBI Trusteeship Services Ltd.

In a development that intensifies the financial turmoil surrounding Coffee Day Enterprises Ltd (CDEL), the insolvency proceedings against the company have recommenced. This follows the National Company Law Appellate Tribunal's (NCLAT) inability to pass an order by the Supreme Court-imposed deadline of February 21.

Last week's pronunciations by NCLAT in Chennai included the completion of hearings and the reservation of its order over an appeal filed by a director of the suspended board of CDEL. In a regulatory filing, CDEL disclosed that since the appeal was not settled by the stipulated date, the stay on the Corporate Insolvency Resolution Process (CIRP) has been vacated, thereby reviving the process.

Originally, the National Company Law Tribunal (NCLT)'s Bengaluru bench had accepted a plea by IDBI Trusteeship Services Ltd, claiming a default worth Rs 228.45 crore, which prompted the appointment of an interim resolution professional. The situation escalated with challenges in higher courts, culminating in the Supreme Court's mandate for a swift appellate decision.

(With inputs from agencies.)