PrideInn Hotels and Investments Ltd has been put under liquidation for inability to pay a Sh69.3 million debt.
High Court Judge Patrick Otieno allowed the winding up petition filed by Tropicana Hotels Ltd saying the debt is not genuinely disputed.
Justice Otieno further ordered that PrideInn Hotels Investment Ltd, which owns a chain of hotels, be placed under a receiver manager until the debt is paid or discharged.
“I appoint the official receiver as the interim liquidator of the company, the order of appointment takes effect forthwith but the official receiver must take charge and running of the affairs of the company not later than October 1,” said Justice Otieno.
PrideInn has filed an appeal against the judgement.
The judge ruled that reasons advanced by PrideInn Hotels Investments for non-payment were neither genuine nor honest. “Therefore no challenge has been made to the foundation of the claims so as to present a bonafide dispute,” said Justice Otieno.
He described the allegation by PrideInn of coercion as a wild card and not a genuine reason for not paying the debt.
“I find this reason to be insufficient justification for failure to pay the contracted debt, there is no genuine dispute disclosed by the company in these proceedings,” said Justice Otieno.
Through lawyer Kinyua Kamundi, Tropicana Hotels Ltd had told the court that PrideInn Hotels Investments was duly informed of non-payment of the money and of the default but it failed to pay the debt.
“More than three months have passed since the demand was made and received but the company has failed to satisfy the whole debt or part of it,” the petition by Tropicana Hotels Ltd reads in part.
Tropicana Hotels Ltd argued that its petition is presented on the grounds that the group of hotels has been unable to pay a debt which was due in April 2012 in spite of issuing postdated cheques.
It sought an order to have PrideInn Hotels and Investments, which operates a chain of hotels in Nairobi and Mombasa, wound up and the court appoint an interim liquidator.
During the course of the hearing, PrideInn Group of hotels said it lost Sh90 million in contracts of service following the advertisement of the petition to wind it up.