NCLT directed for liquidation of debt ridden tulip hotels tribunal failed to receive any bidder during insolvency resolution process

NCLT has directed for the liquidation of debt-ridden Tulip Hotels, arsenic the tribunal failed to person immoderate bidder during its insolvency solution process wrong the prescribed timeline.

On May 16, 2023, the NCLT had directed the initiation of a Corporate Insolvency Resolution Process (CIRP) against Tulip Hotels implicit a plea filed by Yes Bank, claiming a default of Rs 900 crore for 2 firm guarantees issued by it.

Tulip Hotels was a firm guarantor for 2 loans disbursed by Yes Bank to Cox & Kings and EzeeGo One Travel and Tours Ltd. After they defaulted, the fiscal creditor Yes Bank invoked the warrant of Rs 450 crore each fixed for some loans.

However, the RP of Tulip Hotels submitted that during the prescribed timeline of 180 days, nary bids (resolution plan) were submitted for Tulip Hotels during the Corporate Insolvency Resolution Process (CIRP) and the Committee of Creditor (CoC) has besides passed nary for hold of the period.

Hence, helium was near with nary different enactment but to spell for liquidation arsenic per the provisions of the Insolvency & Bankruptcy Code (IBC).

CIRP for Tulip Hotel expired connected November 12, 2023, arsenic the IBC mandates it shall beryllium completed wrong 180 days from the day of admittance of the exertion to initiate the said process.

Upon expiry of the prescribed period, RP has to record an exertion earlier the NCLT for hold of the aforesaid if instructed to bash truthful by a solution by the CoC with a 66 per cent vote.

However, J C Flowers Asset Reconstruction Pvt Ltd (JCFARPL), which holds a 70.83 per cent voting stock successful CoC, successful an email dated December 5, 2024, gave a go-ahead to the liquidation process.

The Mumbai seat of the National Company Law Tribunal (NCLT) has admitted the plea filed by the Resolution Professional of Tulip Hotels seeking liquidation of the institution connected January 16, 2025.

A two-member NCLT seat said aft perusal of averments made successful the exertion and email from JCFARPL holding a 70.83 per cent voting stock successful CoC, it is satisfied and is of the considered sentiment it is successful consonance with the provisions of IBC.

"Accordingly, this Authority has near with nary enactment but to walk an bid for Liquidation of the Corporate Debtor Company successful the mode laid down successful Chapter III of the Code considering the information determination is nary Resolution Plan for information and CoC does not foresee immoderate anticipation of getting Plans for the Corporate Debtor," said NCLT.

The bid further said: "The Application beryllium and the aforesaid is allowed. The Corporate Debtor, M/s Tulip Hotels Private Limited, shall beryllium liquidated successful the mode arsenic laid down successful Chapter-III of the Code." NCLT has besides appointed a liquidator to behaviour the liquidation process of Tulip Hotels.