NCLT restores Hotel Le Royal Meridien to original promoter after lenders unanimously back settlement proposal

The NCLT in its order accepted the settlement proposal submitted by the promoter (Appu Hotels) and allowed the withdrawal of the resolution process (RP).

The National Company Law Tribunal (NCLT) in Chennai has ordered the restoration of the iconic Hotel Le Royal Meridien at Guindy to Appu Hotels Ltd, the original promoter.

The NCLT in its order accepted the settlement proposal submitted by the promoter (Appu Hotels) and allowed the withdrawal of the resolution process (RP).

The NCLT ordered the restoration of the original Board and directed the resolution professional to hand over all the past reports and accounts to the Board. The tribunal also discharged the resolution professional of its duty.
Reacting to the NCLT order, Palani G Periasamy, Chairman of Appu Hotels Ltd, said, “We are delighted to announce that we are back in the hospitality business. Hotel Le Royal Meridien Chennai and Le Meridien Coimbatore are back with us. It is heart warming news for us on the eve of New Year. We are thankful to our valuable customers and all well-wishers all over the world for standing behind us resolutely during the challenging times.”

COVID-19 and prolonged lockdown had impacted the hospitality business, in general, and the Appu Hotels, in particular, he said. “Our finances took a severe hit, leading us into the NCLT framework. But, all that is now behind us,” he added.

Periasamy said the management had made all arrangements for operating the hotel on a full scale in the most luxurious manner.
He said that Hotel Le Meridien in Texcity Coimbatore, another five-star deluxe hotel promoted by the PGP Group, was doing well with a good occupancy level. Le Meridien Coimbatore is a luxury hotel.

The settlement

“The Committee of Creditors (CoC) has deliberated in detail the settlement proposal and took a decision exercising its commercial wisdom by voting 100 percent for the settlement proposal and the same cannot be thrown out on the hyper-technical ground that Regulation 30A was not strictly complied with,” the NCLT said.
“The CIRP initiated by this Tribunal against the Corporate Debtor in IBA/1459/2019 vide order dated 05.05.2020 stands withdrawn. The powers of the Board of Directors which stood suspended is restored and the management and affairs of the Corporate Debtor is directed to be handed over to them by the RP, including the possession and control of books and assets of the Corporate Debtor, if any taken during the CIRP period. The RP is discharged from all his responsibilities. The position of the Corporate Debtor is restored to status quo ante prior to the Insolvency Commencement date. The Corporate Debtor shall operate through its own Board,” the order said.