Byju , the embattled Indian edtech giant, has faced a significant setback as a court official in India excluded its US term-loan lenders from the creditors’ committee. This move has complicated the lenders’ efforts to recover more than $1.2 billion from Byju’s, which is currently struggling with multiple insolvency proceedings in both India and the United States.
The lenders, represented by Glas Trust Company, have been attempting to force Byju’s into insolvency in India. However, their exclusion from the creditors’ committee by Interim Resolution Professional Pankaj Srivastava means they now have no say in critical decisions, such as who should manage the company during the insolvency process. The lenders have accused Srivastava of manipulating the process and secretly plotting to reject their claims, a move they deem “unprecedented and entirely illegitimate.”
This exclusion is particularly crucial as the lenders were also pursuing a $533 million claim in a US bankruptcy court related to Byju’s Alpha, a shell company created to tap into US capital markets. The case involves allegations that Byju’s founder, Byju Raveendran, hid funds to evade repayment, an accusation that has further fueled the lenders’ frustrations.
In India, they had reportedly struck a deal to resolve the main insolvency case filed by India’s cricket board. However, the US lenders have petitioned the Supreme Court of India to block this agreement, arguing that funds meant for them were improperly used to settle the cricket board’s claims.
The ongoing legal battles on multiple fronts underscore the severe financial and operational challenges as it navigates through its insolvency crisis
(mint, Business Standard, BEAMSTART).
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