I removed the workaround in logind.conf and as expected suspend stopped working. It does work from panel menu.
$ systemd-inhibit Who: Telepathy (UID 1000/bruno, PID 2482/mission-control) What: shutdown:sleep Why: Disconnecting IM accounts before suspend/shutdown... Mode: delay Who: bruno (UID 1000/bruno, PID 2070/unity-settings-) What: sleep Why: GNOME needs to lock the screen Mode: delay Who: bruno (UID 1000/bruno, PID 2070/unity-settings-) What: handle-power-key:handle-suspend-key:handle-hibernate-key Why: GNOME handling keypresses Mode: block Who: NetworkManager (UID 0/root, PID 904/NetworkManager) What: sleep Why: NetworkManager needs to turn off networks Mode: delay 4 inhibitors listed. ** Attachment added: "I cleaned up the log up to the logind service restart, so as not to have so many unnecessary entries. If a complete log is needed, I'll reboot and do it again." https://bugs.launchpad.net/ubuntu/+source/systemd/+bug/1574120/+attachment/4648369/+files/journal.txt -- You received this bug notification because you are a member of Ubuntu Touch seeded packages, which is subscribed to systemd in Ubuntu. https://bugs.launchpad.net/bugs/1574120 Title: Notebook doesn't suspend when lid is closed after update to 16.04 Status in systemd package in Ubuntu: Incomplete Bug description: My notebook does not suspend after upgrading from 15.10 to 16.04. According to system settings the notebook should suspend when lid is closed but actually this does not happen. Instead it continues to run as if nothing had happened. With the previous versions of ubuntu (14.04-15.10) everything worked fine. My System: HP Pavilion dv7. ProblemType: Bug DistroRelease: Ubuntu 16.04 Package: acpi (not installed) ProcVersionSignature: Ubuntu 4.4.0-21.37-generic 4.4.6 Uname: Linux 4.4.0-21-generic x86_64 ApportVersion: 2.20.1-0ubuntu2 Architecture: amd64 CurrentDesktop: Unity Date: Sat Apr 23 23:11:15 2016 InstallationDate: Installed on 2015-10-29 (176 days ago) InstallationMedia: Ubuntu 15.10 "Wily Werewolf" - Release amd64 (20151021) SourcePackage: acpi UpgradeStatus: Upgraded to xenial on 2016-04-22 (1 days ago) To manage notifications about this bug go to: https://bugs.launchpad.net/ubuntu/+source/systemd/+bug/1574120/+subscriptions -- Mailing list: https://launchpad.net/~touch-packages Post to : touch-packages@lists.launchpad.net Unsubscribe : https://launchpad.net/~touch-packages More help : https://help.launchpad.net/ListHelp