The core of the legal dispute revolved around an alleged default of Rs 228 crore. Initially, the Bengaluru bench of the National Company Law Tribunal (NCLT) had admitted IDBI Trusteeship’s plea, triggering the commencement of the Corporate Insolvency Resolution Process (CIRP) and appointing an interim resolution professional to oversee Coffee Day Enterprises' operations. This initial ruling posed a significant threat to the company's future, potentially leading to its restructuring or liquidation.
In response, Coffee Day Enterprises swiftly challenged the NCLT's decision, filing an appeal with the NCLAT. The appellate tribunal initially granted a stay on the CIRP, providing temporary relief to the company. However, IDBI Trusteeship Services subsequently escalated the matter to the Supreme Court, seeking to reinstate the insolvency proceedings. The Supreme Court then directed the Chennai bench of the NCLAT to expedite the resolution of the pending appeal, setting a deadline of February 21, 2025. Failure to meet this deadline would result in the automatic disposal of the appeal and the resumption of the insolvency process.
As the February deadline approached, and with the NCLAT unable to deliver its verdict within the stipulated time, the insolvency proceedings temporarily resumed. However, the NCLAT has now delivered its final verdict, ruling in favor of Coffee Day Enterprises and dismissing the bankruptcy plea. This decision has provided significant relief to the company and triggered a strong positive reaction from investors.
Coffee Day Enterprises is the parent company of the Coffee Day Group, which houses Café Coffee Day that pioneered the coffee culture in the chained café segment in India.
On a consolidated basis, Coffee Day Enterprises reported net loss of Rs 10.28 crore in Q3 December 2024 as against net profit of Rs 69.19 crore in Q3 December 2023. Net sales rose 9.15% year-on-year to Rs 280.41 crore in Q3 December 2024.