Insolvency Proceedings Initiated Against Coffee Day Enterprises

The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Coffee Day Enterprises Ltd (CDEL) due to the failure to repay a debt of Rs 228.45 crore. The Bengaluru bench admitted the plea filed by IDBI Trusteeship Services Ltd, appointing an interim resolution professional to manage the debt-ridden company.

The National Company Law Tribunal (NCLT) has ordered insolvency proceedings against Coffee Day Enterprises Ltd (CDEL), parent company of the Coffee Day Group, following a plea by IDBI Trusteeship Services Ltd (IDBITSL) citing a Rs 228.45 crore default.

On August 8, the Bengaluru bench of the NCLT admitted the plea and appointed an interim resolution professional to manage CDEL, which operates the Cafe Coffee Day chain and other ventures. The financial troubles began post the demise of founder Chairman V G Siddhartha in July 2019.

CDEL contended against the plea, arguing IDBITSL lacked authorization under the Debenture Trustee Agreement, but the tribunal highlighted CDEL's own annual reports affirming default. Consequently, the tribunal declared the moratorium, confirming the petition within the limitation period.

(With inputs from agencies.)