SUMMARY
- After the NCLAT overturned the bankruptcy proceedings against BYJU’S, its US-based creditors moved to the Supreme Court to contest the decision and the case is scheduled to be heard on August 12.
- The NCLAT subsequently revoked the insolvency proceedings after BYJU’S announcement of reaching an agreement with the BCCI to settle its debts of Rs 158 crore.
- The US-based creditors opposed the agreement, claiming that Think and Learn director Riju Raveendran intended to transfer $533 million embezzled from them to BCCI.
Just a few days after the National Company Law Appellate Tribunal (NCLAT) overturned the bankruptcy proceedings against BYJU’S, its US-based creditors moved to the Supreme Court to contest the decision.
According to a report from Reuters, the dissatisfied US-based creditors, who have formed the Glas Trust Company, have submitted a petition to amend the order issued by the NCLAT.
The case is scheduled to be heard on August 12. It’s important to note that the NCLAT subsequently revoked the insolvency proceedings after BYJU’S announcement of reaching an agreement with the Board of Control for Cricket in India (BCCI) to settle its debts of Rs 158 crore.
During the proceedings, the US-based creditors opposed the agreement, claiming that Think and Learn (the parent company of BYJU’S) director Riju Raveendran intended to transfer $533 million embezzled from them to BCCI.
The Glas Trust represents over 100 creditors who have funded the US division of BYJU’S, which is currently facing bankruptcy litigation in the Delaware District Court. BYJU’S had stood a guarantee for the loan of $1.2 billion or Rs 8,000 crore. The exact amount the investors are seeking to recover remains undisclosed, but they have been involved in legal disputes in both India and the US for several years.
Previously, the investors had sought approval from the National Company Law Tribunal (NCLT) to initiate a corporate insolvency resolution process (CIRP) against BYJU’S. However, in July, the tribunal dismissed their petition due to the BCCI having already filed an insolvency plea against the edtech. The NCLT, in its order dated July 16, allowed Glas Trust to reinstate its petition, depending upon the further development of the case.
On the domestic front, the creditors have filed a lawsuit in a Bankruptcy Court in Delaware to attempt to recover their funds. Earlier this month, the court ordered Raveendran to pay a daily fine of $10,000 until he assists in locating the $533 million that his company allegedly hid from the US lenders.
Furthermore, the startup is grappling with numerous legal issues, including delays in submitting its financial reports, escalating losses, multiple insolvency petitions, regulatory challenges, staff reductions, and the most pressing issue of a cash shortage.
