In the US, the lenders have been trying to track down $533 mn that Byjus founder, Byju Raveendran, allegedly said was so well hidden, no one would ever find it | Photo: Bloomberg3 min read Last Updated Sep 04 2024 | 8:17 AM ISTBy Steven Church and Sankalp PhartiyalUS 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 Byjus.The decision by the official, who is overseeing an insolvency case against Byjus, means that the lenders didnt 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 Byjus 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 Srivastavas 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 Byjus into an insolvency proceeding in a court in India for months, but with limited success.
One part of that court fight is now before Indias Supreme Court.In the US, the lenders have been trying to track down $533 million that Byjus founder, Byju Raveendran, allegedly said was so well hidden, no one would ever find it, according to court documents.Byjus faces a fraudulent-transfer lawsuit in a US bankruptcy court.
That case involves Byjus Alpha, a shell company created by Byjus in order to tap US capital markets.
After Byjus 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, Byjus had a deal to end the main insolvency case against it, filed by Indias 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 BYJUs Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).First Published: Sep 04 2024 | 8:17 AMIST