As landlord goes under, top eateries fend for themselves

With insolvency process underway for Juhu's Horizon Hotel, 10 establishments, including Indigo Deli, Wine Villa and I Think Fitness, stare at uncertainty

As Horizon Hotel in Juhu faces bankruptcy, restaurants and other commercial enterprises it houses are left in a quandary. The National Company Law Tribunal (NCLT) on January 29 passed an order to appoint the Interim Resolution Professional (IRP) in case of Insolvency and Bankruptcy against Hotel Horizon Pvt Ltd. On Friday, 10 of the tenants at the hotel came together to appeal to the IRP as a collective.

The ORDER passed by the National Company Law Tribunal stated that "the Corporate Debtor approached IDFC Limited in March 2008, requesting for certain financial facilities which was granted to it." It added that after the payment of first term of the loan, the hotel sought further financial assistance from IDFC, HDFC, and Union Bank of India.

There is outstanding amount from remaining two terms of loans following which the company was declared as a non-performing asset. However, it argued that this was a false and incomplete statement of accounts as they had already repaid second term of loan. Following the arguments, the NCLT bench has appointed Interim Resolution Professional (IRP) for Corporate Insolvency Resolution Process. The hotel, according to the NCLT order, is in debt of R93,86,52,393.

Vishal Sharma, director of Horizon Hotel Pvt Ltd, said, "The matter is subjudice. An order of admission was passed without the matter being heard on merits. We have filed an application to have the order recalled. The building is under company's ownership yet. The existing establishments continue to stay as they are." About the possibility of auction of the property, he said that these were "all rumors."

'The show must go on'
The predicaments that the tenants at Horizon Hotel are faced with, range from maintenance issues in the current circumstances to the future of their establishments. However, their primary concerns include understanding who they pay rent to in the interim process and the settlement of the deposits lying with Sharma. Ten of the tenants thus appealed to the IRP.

"We reached out to the IRP but someone also needed to take care of the maintenance. We needed security, house-keeping, electricity and water, so all of the tenants came together and contributed towards that. The owners have lost the right to operate the accounts, so we had to step in and run the show," says Anurag Katriar, business head of deGustibus Hospitality, which owns Indigo Delicatessen inside the hotel.

Anurag Katriar of Indigo Delicatessen

At a tenants' meeting on Friday, their legal counsel explained to them that they must continue paying rent to the Horizon Hotel account, which would now be operated by the resolution professional (RP). "With the RP taking over, we are expecting things to take the natural course of action," Katriar added.

Suren Joshi of I Think Fitness agreed, saying that they needed to abide by the rent and lease agreement. "But we also have to ensure that we are secure and that the building and our businesses are functioning smoothly. I have a footfall of 150 to 200 at the gym so I am only concerned about basic things like the AC, water and other amenities," he explained.

Mickey Panjwani of Wine Villa

Way forward for tenants
For Mickey Panjwani of Wine Villa too, the dilemma is much the same, but also spoke of being mislead by Sharma. "Initially Sharma had told us that multinational hotel brands will be coming to the building and showed us pictures too. But none of that has happened and the building gets very little footfall," he said.

Speaking of the maintenance and other day-to-day issues until things are back in order, Katriar said that the tenants will have to look into it and the costs incurred will be eventually adjusted with the Common Area Maintenance that they pay each month. "The RP is responsible for ensuring that the operations of the facility go on smoothly. For now, we have nothing to worry about and the show must go on," he said.

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