Kerala HC Summons BYJU’S RP, Glas Trust & EY India On Dec 5

SUMMARY

The HC issued the order on a plea filed by Voizzit Technology, which has claimed rights over the edtech startup’s foreign assets, including Epic! and Tynker

Despite Kerala HC in May restraining the RP and the edtech’s lenders from selling these two assets, both Epic! And Tynker were sold in a fire sale a month later

This comes a week after founder Byju Raveendran said that he would file a $2.5 Bn defamation lawsuit against lender Glas Trust and the RP in the coming days

The Kerala High Court (HC) has reportedly summoned BYJU’S resolution professional Shailendra Ajmera, EY India chairman Rajiv Memani and Glas Trust representative on December 5.

As per Economic Times, the HC issued the order on a plea filed by Voizzit Technology, which has claimed rights over the edtech startup’s foreign assets, including kids’ learning platform Epic! and coding platform Tynker.

This follows the HC, acting on Voizzit’s plea, in May restraining the RP and the edtech’s lenders from selling these two assets. However, US bankruptcy attorney Claudia Springer, who has been managing the insolvency proceedings of BYJU’S US subsidiaries, is said to have gone ahead with the auction of these assets.

In June this year, it was reported that the two companies, bought earlier by BYJU’S, were sold off by the edtech platform’s consortium of lenders at a massive haircut to settle accounts.

Tynker was bought by computer science learning platform CodeHS for $2.2 Mn in a cash deal, a 99% reduction from $200 Mn paid by BYJU’S in 2021. Similarly, Epic! was lapped up by Chinese education company TAL Education Group at $95 Mn, a steep discount of 81% compared to the $500 Mn BYJU’s paid in 2021.

The two fire sales were part of BYJU’S bankruptcy process in the US, which involved an unpaid term loan of $1.2 Bn.

The latest flashpoint comes close on the heels of a US bankruptcy court, in a default ruling, directing BYJU’S founder BYJU Raveendran to pay $1.07 Bn. The order noted that the beleaguered founder had refused to cooperate with legal efforts to locate $533 Mn worth of proceeds from a $1.2 Bn term loan B (TLB), which was raised by the edtech startup in 2021.

What followed was Raveendran last month announcing plans to file a $2.5 Bn defamation lawsuit against the troubled edtech startup’s consortium of lenders, Glas Trust, and the RP in the next 30 days.

In another blow to Raveendran, the Supreme Court (SC), last week, also reportedly dismissed his appeal, which challenged an NCLAT order that ruled that committee of creditors’ (CoC) approval is mandatory for BCCI to withdraw insolvency proceedings against the troubled edtech.

On top of this, Aakash, which was acquired by BYJU’S in a cash and stock deal in 2021, suspended the allotment of INR 25 Cr shares to the troubled edtech startup, citing potential non-compliance with foreign exchange rules, the Companies Act, and other guidelines.

At the heart of the matter is the $1.2 bn TLB loan raised by BYJU’S in 2021. Due to mounting losses and revenues in freefall, the edtech could not pay back its loans and its US lenders dragged the company to court.

The creditors later alleged the company violated the terms of the loan and $533 Mn out of the total debt was moved out of the US illegitimately.