BYJU’S Glas Trust Case: SC Asks IRP To Maintain Status Quo Until Judgement

The Supreme Court on Thursday (September 26) reserved its verdict on a petition filed by the US-based lenders of BYJU’S that challenged the National Company Law Appellate Tribunal’s (NCLAT) decision to stop insolvency proceedings against the edtech firm.

An SC bench, comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra, directed the edtech startup’s insolvency resolution professional (IRP) to maintain the status quo until the court delivers its judgement.

During the hearing, the SC issued further directions to the IRP not to proceed with the committee of creditor’s meeting to deal with the BYJU’s case.

As per a separate Moneycontrol report, the counsel for the creditors of BYJU’S discussed possible conditions for a settlement, including ensuring that any payments made should not come from BYJU’S assets. 

Referring to Regulation 30A of the Insolvency and Bankruptcy Code (IBC), the court also reportedly flagged concerns about whether current laws allow for a settlement to bypass the established procedures.

This comes a day after the SC bench on Wednesday (September 25) questioned the NCLAT decision to strike off the bankruptcy proceedings against the embattled edtech startup. In the same hearing, the bench also reportedly observed that it was mulling sending the matter back to the NCLAT. 

The SC hearing comes days after the Delaware Supreme Court (SC) ruled that BYJU’S had defaulted on its TLB. With the judgement, the US-based lenders can now legally demand full repayment of the loan as well as take full control of BYJU’s Alpha.

At the heart of all this are the ongoing insolvency proceedings against the company, which were initiated earlier this year. Following this, the consortium of the US-based lenders has claimed dues to the tune of INR 11,432 Cr ($1.36 Bn).

Meanwhile, the ongoing drama is expected to add more fuel to the fires at BYJU’S. The edtech major has been in the news for all the wrong reasons including mass layoffs, pending salaries of employees, mounting losses, cash crunch, and the list goes on.

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