Glas Trust Approaches NCLT Seeking Removal Of IRP For Byju’s Company
Glas Trust Approaches NCLT Seeking Removal Of IRP For Byju’s Company
The firm was dropped from the committee of creditors by Pankaj Srivastava
The US lender Glas Trust Co LLC has moved the Bengaluru bench of the National Company Law Tribunal (NCLT) to seek the removal of Pankaj Srivastava as Insolvency Resolution Professional (IRP) for Think & Learn Pvt Ltd, the parent company of the troubled ed-tech firm Byju's.
The trustee for lenders, owning $1.2 billion from Byju's was removed from the committee of creditors (CoC) by Srivastava, who concluded that Glas Trust did not represent the minimum 51 percent of lenders required to be part of the CoC, a crucial entity in the insolvency proceedings.
The CoC’s first meeting was held recently after the Supreme Court refused to stay the meetings of the newly appointed CoC.
The lenders had extended a $1.2 billion term loan B to Byju's Alpha, a US-based subsidiary of Byju's. Recently, the lenders filed a bankruptcy case in the US, accusing Byju Raveendran of diverting more than $500 million from $1.2 billion.
Byju's disqualified most of the lenders represented by Glas Trust, citing its right under the credit agreement to exclude predatory lenders focused on distressed debt.
Thus, Glas Trust does not meet the required threshold to pursue claims against Byju's due to lender disqualifications. The obligation of the parent company to repay the loan as a guarantor arises only upon a legitimate acceleration, which has not been established.
Meanwhile, the apex court is hearing Glas Trust’s appeal, opposing the Rs.158 crore settlement arrived at between the ed-tech firm and the Board of Control for Cricket in India (BCCI) alleging the money paid by Raveendran's brother Riju Ravindran was tainted.
In August, the top court revived the insolvency case against Byju's, suspending the order of the National Company Law Appellate Tribunal (NCLAT) that quashed the bankruptcy proceedings against the company and approved the settlement deal with BCCI.
Recently, Think & Learn’s five foreign investors General Atlantic Singapore TL Pte Ltd, Peak XV Partners Investments IV, Peak XV Partners Investments V, Sofina S.A., and MIH Edtech Investments, had moved the Supreme Court.
The companies sought intervention in the ongoing case filed by Glas Trust against setting aside of the insolvency proceedings against Byju's and restoration of its board by the appellate tribunal.
