BYJU'S US Lenders Move SC Against NCLAT Order To Quash Insolvency Proceedings

BCCI Moves NCLT To Withdraw Insolvency Plea Against BYJU’S

SUMMARY

Glas Trust Company, a consortium of the startup's aggrieved US-based lenders, filed the plea challenging the NCLAT order in the Supreme Court

The NCLAT, earlier this month, quashed the insolvency proceedings against BYJU’S after it said it reached an agreement with the BCCI to pay off its dues of INR 158 Cr

The US-based lenders opposed the agreement during the NCLAT hearing, saying that Riju Raveendran will use the $533 Mn allegedly syphoned from them to pay the BCCI

Days after the National Company Law Appellate Tribunal (NCLAT) quashed the bankruptcy proceedings of embattled BYJU’S, the edtech giant’s US-based lenders have moved the Supreme Court against the order.

Glas Trust Company, a consortium of the startup’s aggrieved US-based lenders, filed the plea challenging the NCLAT order in the Supreme Court, Reuters reported. The matter will be heard on August 12.

It is pertinent to note that the NCLAT, earlier this month, quashed the insolvency proceedings after BYJU’S said it reached an agreement with the Board of Control for Cricket in India (BCCI) to pay off its dues of INR 158 Cr. During the hearing, the US-based lenders opposed the agreement, saying that Think and Learn director Riju Raveendran will use the $533 Mn allegedly syphoned from them to pay the BCCI.

Think & Learn is the parent entity of BYJU’S.

Glas Trust represents over 100 lenders who provided money to the US-based entity of BYJU’S, which is currently struggling with bankruptcy hearings at a court in Delaware. BYJU’S had stood a guarantee for the loan of $1.2 Bn (about INR 8K Cr).

While the exact amount that the investors are seeking to get back isn’t confirmed, they have been involved in court cases in India and the US for some time now. In India, the investors earlier approached the National Company Law Tribunal (NCLT) to initiate an corporate insolvency resolution process (CIRP) against BYJU’S. However, the tribunal disposed of their petition in July, as the BCCI’s insolvency plea was already admitted.

In its order on July 16, the NCLT gave Glas Trust the liberty to seek restoration of its petition, “depending on the subsequent developments in the matter at the Appellate level”.

On their home soil, the lenders have moved the Bankruptcy Court of Delaware seeking to get their money back. Earlier this month, the court ordered Raveendran to pay $10,000 a day until he helps locate $533 Mn that his company is accused of hiding from US lenders.

Besides fighting the legal hurdles, the startup is facing a number of issues on several other fronts. From delays in filing financial statements, mounting losses, and multiple insolvency proceedings to regulatory scrutiny, layoffs, and a severe cash crunch, there seems to be no end to BYJU’S troubles.