BoI takes Future Lifestyle to NCLT under bankruptcy code for due recovery
Bank of India (BoI) has dragged Kishore Biyani-controlled Future Lifestyle Fashions (FLFL) to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) for recovery of dues.
FLFL — in its filing with the BSE — said Saraf and Partners, advocates, on behalf of BoI, has served a petition under Section 7 of the IBC 2016.
The company is in the process of taking legal advice in the matter.
Future Retail and Future Enterprises, both part of the Biyani-led group, are already in NCLT facing cases on payment defaults.
Catalyst Trusteeship has already taken FLFL under clause 7 of the IBC to NCLT for claims worth Rs 451.98 crore. The petition is slated for hearing on Tuesday.
Another entity Lotus Lifespaces LLP has dragged the company under Section 9 of the IBC for claims worth Rs 150.37 crore. The cases are slated for hearing on September 26. Both petitions are yet to be admitted by the NCLT.
Section 9 of the IBC gives power to operational creditors of a company to initiate a corporate insolvency resolution process in case of a default.
Operational creditors are those whose debt is owed on account of dues arising out of business transactions. This mostly includes claims for the delivery of goods or services and employment.
The Biyani-controlled entity said as part of business revival, the Board has already initiated the monetisation of identified assets. The company was also in discussion with lenders for its proposal for restructuring financial debt. It would be submitting the proposal in due course of time after getting approval from the Board.
Under this situation, banks would have an option to evaluate and consider the proposal, it said.