US Court rejects Byju’s lenders plea to block settlement with BCCI

A US court has rejected a plea by Byju's overseas lenders through which they sought to block the settlement between the troubled startup and the Board of Control for Cricket in India (BCCI), approved by an Indian court. The Delaware Bankruptcy Court refused to interfere with proceedings in another country’s judicial system. The settlement between BCCI and Byju’s which was approved by the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) last week, related to a dispute over non-payment of Rs 159 crore in dues that Byju’s owed to the cricket governing body. The NCLAT order effectively quashed insolvency proceedings against Byju’s, putting the company back under the control of founder and CEO Byju Raveendran.

In a statement, Byju’s said that the US court’s decision recognised that granting lenders the requested relief would be an extraordinary and unjustified move. “The Delaware Bankruptcy Court’s decision effectively puts an end to Glas’ (Glas Trust Company represented the foreign lenders) attempts to forum shop. Glas had tried and failed to scuttle the settlement between BCCI and one of the promoters of Byju's before the NCLAT in India, prompting them to approach the Delaware Court for the same relief. In its latest order, the Delaware Court had upheld the principle of comity and thwarted Glas’ attempt to usurp the jurisdiction of the Indian courts,” said Rishab Gupta, legal counsel for Byju’s.

Raveendran’s brother and company board member Riju Ravindran used his personal funds raised through the sale of his shares in Byju’s parent Think & Learn (between May 2015-January 2022) and liquidation of his personal assets in India to clear BCCI’s dues. Byju’s lenders had argued in NCLAT that the payment of operational creditor (BCCI) over financial creditors violates the provisions of the Insolvency and Bankruptcy (IBC) code.

Once a high-flying decacorn startup valued at $22 billion, Byju’s has slashed several thousand jobs, shut most of its offices and has been dragged to court by investors, lenders and employees.

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