In a big relief for Byju’s, Delaware Bankruptcy Court in the US has rejected attempts by GLAS Trust Company, which represents the foreign lender consortium, to impede the edtech firm’s ongoing turnaround efforts.
Byju’s on Thursday said this ruling reinforces the validity of the settlement between the Board of Control for Cricket in India (BCCI) and Think & Learn Private Limited (TLPL), its holding company, which was previously approved by India’s National Company Law Appellate Tribunal (NCLAT).
Judge Brendan Shannon of the Delaware Bankruptcy Court rejected GLAS’s application for a temporary restraining order aimed at blocking the BCCI settlement. The judge expressed deep concern about being asked to interfere with the proceedings in another country’s judicial system, stating: “I am deeply concerned that I am being asked for relief that would frustrate proceedings in another country.”
Byju’s said this statement aligns with the assertion of the company’s counsel that such interference “would be an unimaginable insult to the system in India”.
The court’s decision affirmed that it has no jurisdiction over the BCCI to halt the settlement and recognized that granting GLAS’s requested relief would be an extraordinary and unjustified measure. Byju’s said this ruling follows GLAS’s unsuccessful attempt to convince the NCLAT in India to block the settlement, further validating the edtech firm’s position and the integrity of the Indian legal process.
“The Delaware Bankruptcy Court’s decision effectively puts an end to GLAS’s 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,” said Rishab Gupta, legal counsel for Byju’s. “In its latest order, the Delaware court has upheld the principle of comity and thwarted GLAS’s attempt to usurp the jurisdiction of the Indian courts,” Gupta added.
Shannon rejected the lender request to block Riju Raveendran, brother of Byju’s founder Byju Raveendran, from paying more than ~158 crore ($19 million) to BCCI.
Last week, Byju Raveendran was back in control of the company. The insolvency resolution process against Think and Learn was halted as the NCLAT accepted the settlement reached between Byju Raveendran and the BCCI.
Byju’s US-based lenders had opposed the settlement. They told NCLAT that the money being used for the repayment is tainted as it is part of $533 million that had gone “missing”.
Riju Raveendran, also a Byju’s board member, had told the NCLAT that the money paid to the BCCI is “clean”. His counsel had told the court that the money paid to BCCI was not part of the “missing” $533 million as alleged by the lenders. The missing money is at the heart of a fight between the US lenders and Think & Learn.
A day after the NCLAT order gave Byju Raveendran control of his company, he filed a caveat in the Supreme Court to be informed if the US lenders decide to appeal against the order.
The bankruptcy court in India had recently admitted the insolvency petition against Byju’s by the BCCI over dues amounting to ~158.90 crore over cricket sponsorship deals.
First Published: Aug 08 2024 | 5:58 PM IST
