Companies

Court gives UB Holdings another chance for one-time settlement of dues

Krishnaprasad Bengaluru | Updated on January 15, 2018

The Karnataka High Court on Wednesday gave another chance to former liquor baron Vijay Mallya’s United Breweries (Holdings) Ltd to make a “fair” offer to the banks for a one-time settlement of dues.

This was offered to avert the court’s order for winding up of the company for its failure to pay admitted liabilities to the unsecured and the secured creditors as per its corporate guarantee extended to Kingfisher Airlines Ltd (KFA).

A Division Bench comprising Chief Justice Subhro Kamal Mukherjee and Justice Budihal RB made the oral observation in this regard while adjourning further hearing till April 4 on the appeal filed by the UBHL against the winding up order.

Earlier, it was pointed out by UBHL counsel that the company has written to the banks with regard to one-time settlement as per the suggestion made by the Bench on March 15.

However, the counsel for the banks told the Bench that UBHL has only written to the banks asking the current schemes for one-time settlement of dues. And the banks have responded to the company stating that there is no specific one-time settlement for this nature of case.

Winding up impact

To this, the Bench made it clear that it is not bothered that the promoters of the company will suffer in case of winding up, but it is only concerned about the impact the winding up will have on 200 employees working in the UBHL and small unsecured creditors.

Meanwhile, the counsel for the banks made it clear that UBHL has no other option but to make some payment to the banks if it has to sustain its appeal against the winding up order.

Published on March 22, 2017

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