BYJU’S Insolvency: NCLT Postpones Decision On Glas Trust’s Plea Against CoC Meetings

SUMMARY

The NCLT refused to stay the meetings of the committee of creditors (CoC), citing a previous Supreme Court ruling that allowed the constitution of the CoC

The Tribunal asked Glas Trust, a consortium of US-based lenders of BYJU’S, to file a separate a fresh plea challenging its removal from the CoC

This comes after US lenders accused BYJU’S insolvency resolution professional of fraud and “secretly plotting” to reject their $1.35 Bn claim against the debt-ridden edtech startup

Amid escalating tensions between BYJU’S insolvency resolution professional and its US-based lenders, the Bengaluru bench of the National Company Law Tribunal (NCLT) has postponed its verdict on the petition filed by Glas Trust, seeking a stay on further meetings of the committee of creditors (CoC).

Glas Trust, a consortium of US-based lenders that extended a $1.2 Bn term loan B to BYJU’S parent company Think & Learn Pvt Ltd in 2021, was reportedly ousted from the creditors’ committee within minutes of its first meeting on September 3.

Pankaj Srivastava, the interim resolution professional, removed Glas Trust from the creditors’ committee, claiming it did not represent the minimum 51% of the lenders in the consortium.

During the hearing on September 4, Glas Trust’s counsel contended Srivastava’s move, saying his actions undermined the tribunal’s authority and urged it to halt further meetings of the CoC, Moneycontrol reported.

However, the bench of Justices K Biswal and Manoj Kumar Dubey, deferred the hearing to September 11 and refused to stay the CoC meetings, citing the Supreme Court order that had allowed the formation of the CoC.

The NCLT reportedly asked Glas Trust to file a fresh plea challenging its exclusion from the creditor’s committee if it wished to pursue the matter.

It is pertinent to note that the Supreme Court last month overturned the NCLAT’s ruling that quashed the bankruptcy proceedings against BYJU’S and approved an INR 158.9 Cr settlement between the debt-ridden edtech firm and the Board of Control for Cricket in India (BCCI).

Earlier today, Glas Trust accused BYJU’S resolution professional of secretly plotting to reject the US lenders’ $1.35 Bn claim against the troubled edtech startup.

Calling Srivastava’s actions “fraudulent”, the lenders alleged that he manipulated the process by moving up the CoC meeting by nine hours and failed to notify either Glas Trust or its advisors about the same.