Court official excludes US lenders from Byju’s creditors committee in major setback: Report
A court official in India removed US lenders from Byju’s creditors committee, complicating their bid to reclaim over $1.2 billion. The lenders allege manipulation and illegitimate actions by the official, while also pursuing a separate $533 million claim in US bankruptcy court.
US lenders were kicked off an influential creditors committee by a court official in India, dealing the group a setback in their efforts to collect more than $1.2 billion from the troubled education tech company, Think & Learn Pvt, which is known as Byju’s.
The decision by the official, who is overseeing an insolvency case against Byju’s, means that the lenders didn’t have a chance to vote on who should run the company while a plan to repay creditors is put together. The lenders accused the official — Byju’s Interim Resolution Professional Pankaj Srivastava — of “secretly plotting to reject” their claims and of manipulating the creditors vote by excluding them.
Before the lenders’ representative, Glas Trust, even learned that they had been removed, Srivastava held a meeting of the creditors committee and was selected as “permanent resolution professional,” lenders alleged in an emailed statement. Srivastava did not respond to an email sent after business hours in India.
“Pankaj Srivastava’s actions are unprecedented and entirely illegitimate as no interim resolution professional in the history of the Insolvency and Bankruptcy Code of India has ever attempted to unlawfully strip financial creditors of claims of this magnitude,” the lenders said.
Lenders have been trying to force Byju’s into an insolvency proceeding in a court in India for months, but with limited success. One part of that court fight is now before India’s Supreme Court.
In the US, the lenders have been trying to track down $533 million that Byju’s founder, Byju Raveendran, allegedly said was so well hidden, no one would ever find it, according to court documents.
Byju’s faces a fraudulent-transfer lawsuit in a US bankruptcy court. That case involves Byju’s Alpha, a shell company created by Byju’s in order to tap US capital markets. After Byju’s defaulted, lenders seized control of the shell company, put it under court protection and sued to get $533 million they claim should go to them.
In India, Byju’s had a deal to end the main insolvency case against it, filed by India’s governing board for cricket. The lenders have asked the Supreme Court of India to block that deal, arguing money that should go to them was wrongly being used to pay off the cricket board instead. The court has not yet ruled on that appeal.
The US bankruptcy case is BYJU’s Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).
Disclaimer: This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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Business NewsCompaniesNewsCourt official excludes US lenders from Byju’s creditors committee in major setback: Report
First Published:4 Sep 2024, 07:44 AM IST
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