NCLAT overturns Asian Hotels West's insolvency

The National Company Law Appellate Tribunal (NCLAT) annulled insolvency proceedings against Asian Hotels (West), the operator of Hyatt Regency in Mumbai. The appellate insolvency tribunal also approved the proposal put forth by the former promoters and directors of the company in accordance with Section 12A of the Insolvency & Bankruptcy Code. NCLAT remarked that the decision made by the lenders of Asian Hotels (West) was deemed arbitrary for not endorsing the 12A Proposal, who promised to settle the entire debt owed to financial creditors and other creditors. The Proposal under 12A, submitted by the Appellant (former promoters) dated August 11, 2023, as revised on October 4, 2023, is accepted. The Corporate Insolvency Resolution Process (CIRP) is concluded, declared the NCLAT order. The NCLAT order additionally mentioned that the order issued by the New Delhi Bench of the National Company Law Tribunal (NCLT) on September 16, 2022, admitting the Section 7 application, has been revoked. Asian Hotels (West) had initially borrowed funds from YES Bank, and subsequently, the debt was transferred to JM Financial Asset Reconstruction, which, in turn, was assigned to UV Asset Reconstruction Company. A two-member bench criticized UV Asset Reconstruction Company, stating that the claim acknowledged in the Corporate Insolvency Resolution Process (CIRP) amounted to Rs 2.95 billion, which was intended to be fully settled under the 12A proposal. Nevertheless, UVARCL had proposed a total payment of Rs 3.29 billion.