BENGALURU: In a setback for Byju's, the Supreme Court on Wednesday stayed the National Company Law Appellate Tribunal's (NCLAT) order that approved the settlement between the edtech firm and the BCCI.
Byju's US-based lenders had approached the Supreme Court and now insolvency proceedings against the company have been revived. A bench led by Chief Justice DY Chandrachud said that they are staying the judgment. The SC also asked the BCCI to keep Rs 158 crore in a separate escrow account and the next hearing will be held on August 23.
US-based Glas Trust challenged the NCLAT order as it claimed the money (Rs 158 crore) being paid to the BCCI was tainted. Glas Trust is the trustee for lenders to which the edtech firm owes $1.2 billion.
On July 16, the NCLT, Bengaluru bench, had admitted an insolvency petition filed by the BCCI against Byju's over a Rs 158 crore debt, and Byju Raveendran immediately moved the NCLAT Chennai challenging the insolvency order. On August 2, the NCLAT quashed an insolvency order issued by the NCLT.
This SC order comes a week after a US court dismissed Glas Trust's application for a temporary restraining order aimed at blocking Byju's settlement with the BCCI.
Judge Brendan Shannon of the Delaware Bankruptcy Court had rejected Glas' application. Earlier in June, the ad hoc group of term loan lenders of Byju's Alpha Inc. had said that certain holders of the term loans and Glas Trust Company LLC have filed petitions pursuant to Chapter 11 of the US Bankruptcy Code to initiate involuntary Chapter 11 proceedings against Epic!, Neuron Fuel (DBA Tynker), and Tangible Play (DBA Osmo), the three US-based guarantors of the term loans in the US Bankruptcy Court.
In 2021, Byju's Alpha, Inc. was established as a US subsidiary of the firm to receive proceeds of the term loans, and the firm secured a $1.2 billion term loan in November 2021.