Byju's IRP Ousts Glas Trust From Committee Of Creditors; Lenders Cry Foul
The Supreme Court had denied relief to Byju's on insolvency proceedings based on appeal filed by Glas Trust.
Edtech firm Byju's insolvency resolution professional has removed the company's $1.2-billion Term Loan B lenders' representative Glas Trust from the committee of creditors, according to sources.
The lenders have, however, alleged that the move is unlawful and BYJU's insolvency resolution professional has been secretly plotting against the $1.35-billion claim of US lenders against the beleaguered edtech firm.
The Supreme Court had denied relief to Byju's on insolvency proceedings based on appeal filed by Glas Trust.
The apex court had on Aug. 14 stayed the verdict of NCLAT, setting aside the insolvency proceedings against the ed-tech major and approving its Rs 158.9-crore dues settlement with the Indian cricket board.
"In a major development in the ongoing insolvency resolution process for Byju's, Glas Trust Inc, purportedly representing several US-based lenders, has been ousted from the Committee of Creditors by the Insolvency Resolution Professional, Pankaj Srivastava," a source said.
When contacted, a spokesperson for the steering committee of the Term Loan Lenders said that the IRP Pankaj Srivastava has been secretly plotting to reject the claims of the term loan lender.
"Pankaj Srivastava (Pankaj)'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 amounting to more than $1.35 billion without any legitimate reason and in doing so securing his appointment as the permanent resolution professional," the lenders' spokesperson said in a statement.
The spokesperson said that prior to Aug. 2, the IRP had repeatedly confirmed in writing and verbally (including in court filings) that the claim filed by Glas Trust on behalf of the lenders in the amount of about $1.35 billion had been verified and admitted and that Glas Trust was undoubtedly a member of the CoC.
The lenders' spokesperson alleged that the IRP abruptly cut off all communication to the lenders or Glas Trust on Aug. 27 and since then, he also ignored all efforts by advisors of Glas Trust to reach him to check-in on the status of the insolvency process.
According to the spokesperson, IRP Pankaj informed Glas and other CoC members on Aug. 30 that he will reschedule the CoC meeting to September 3 at 7 p.m. IST but held a meeting in the morning at 10 am, seven hour before the schedule, without informing the US-based lenders.
"The complete 180 degree change in position, the sealed filing, the secretive change in time of the COC meeting and the backdated letter, all demonstrate a clear intention to mislead and blindside Glas Trust and the lenders," the spokesperson said.
Separate emails sent to Byju's and its US-based lenders seeking their comment did not elicit any response.
According to the source, the IRP has included Incred Financial Services, Aditya Birla Finance, ICICI Bank among creditors.
The US-based lenders involved in disputes with Byju's have extended a $1.2 billion Term Loan B to the edtech firm's US-based subsidiary Byju's Alpha. The lenders are embroiled in legal disputes against Byju's in the United States, seeking accelerated repayment along with penalties.
While the matter related to the TLB is sub-judice in the US, the lenders have also approached Indian courts for relief.
