NCLT Directs BYJU’S US-Based Lenders’ To Stake Their Claim Before IRP

BYJU’S Insolvency Case: SC To Hear Glas Trust’s Plea On Sept 17

SUMMARY

The NCLT asked the US-based lenders, represented by GLAS Trust, to put forth their claims before the interim resolution professional (IRP) appointed for the company

In its order, the Tribunal also granted GLAS Trust the liberty to seek restoration of its petition, "depending on the subsequent developments in the matter at the Appellate level”

GLAS Trust represents over 100 lenders who provided money to the US-based entity of BYJU’S

The Bengaluru bench of the National Company Law Tribunal (NCLT) on Tuesday (July 16) disposed of the insolvency plea filed by embattled edtech giant BYJU’S US-based lenders and asked them to put forth their claims before the interim resolution professional (IRP) appointed for the company.

Earlier today, the Tribunal admitted the Board of Control for Cricket in India’s (BCCI’s) petition to initiate the corporate insolvency resolution process (CIRP) against BYJU’S for not paying the dues to the cricket board.

In its order in the case of the US-based lenders, the NCLT said that the petitioner GLAS Trust Company LLC is at liberty to put forth its claims before the IRP.

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).

In its order, the Tribunal also granted GLAS Trust the liberty to seek restoration of its petition, “depending on the subsequent developments in the matter at the Appellate level”.

In the BCCI’s case, the Tribunal appointed Pankaj Srivastava as the IRP and directed him to issue a public notice to invite claims from all creditors. BYJU’S owes INR 158.9 Cr to BCCI for sponsorship of the Indian cricket team.

The development comes at a time when BYJU’S is dousing fires on multiple 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.

To add to this, BYJU’S has been locked out of more than 100 BYJU’S Tuition Centre (BTC) across the country. Inc42 reported earlier today that the action was taken by the owners of the properties as the startup failed to pay rent as well as utilities bills for the past three months.

BYJU’S has been banking on its rights issue to revive the startup. However, the proceedings from the rights issue have been kept in an escrow account on the NCLT’s order. Besides, it couldn’t raise the entire $200 Mn amount from the rights issue and was looking to launch a second rights issue, which is also mired in legal troubles now.