Byju's Insolvency: US Based Lenders Challenge Removal From Committee Of Creditors
The lenders allege that their voting share has been reduced from 99.41% to 0%.
The apex court heard US-based lenders represented by Glas Trust LLC, who have almost Rs 11,000 crore in claims, contest their removal from the committee of creditors (CoC) of debt-ridden Think & Learn Pvt. Ltd., the parent company of Byju's.
The lenders, represented by senior advocate Kapil Sibal, said that their voting share in the CoC by value is 99.41% but the interim resolution professional Pankaj Srivastava has disqualified them from voting.
"Our voting share has been reduced from 99% to 0% and the creditor that has a share of 0.18% now has 100% of the voting share," Sibal said.
Sibal added that the interim resolution professional performed an adjudicatory function in removing them from the CoC, which is impermissible under law.
Glas Trust was removed from the CoC on Sept. 3 on the ground that some documents were not supplied to the interim resolution professional.
The top court will continue hearing the case on Sept. 18.
On Aug. 14, the top court ordered a stay on the National Company Law Appellate Tribunal's approval of Byju's settlement with the Board of Control for Cricket in India over dues to the tune of Rs 158 crore.
In effect, the top court’s order meant that the insolvency process, which was brought to a halt by the NCLAT, stood revived.
Last month, the NCLAT approved Byju's settlement with the BCCI, putting an end to its insolvency process. According to the settlement, Byju's committed to settling its dues with the BCCI, with payments scheduled for Aug. 2 and Aug. 9.
Approving the settlement, the NCLAT said that if payments are not made according to schedule, the insolvency process will be resumed.
The US-based lenders are opposing the settlement based on the allegation that the money being used for the said settlement was syphoned from them and its sources are questionable.
The insolvency resolution process against beleaguered Byju's was initiated in July, following the edtech's default on a Rs 158.9 crore payment to the BCCI.
