Supreme Court halts creditors meeting in Byju’s insolvency case

Mumbai: In the latest hurdle in the insolvency proceedings against Byju’s, the Supreme Court has directed the edtech firm’s resolution professional not to hold meetings of the company’s committee of creditors until the court passes its final judgement. 

This will delay the bankruptcy resolution proceedings as a meeting of Byju’s committee of creditors was scheduled for Thursday. 

“We reserve our judgement... and direct the resolution professional to not hold any CoC meetings until the final order is passed in the matter,” Chief Justice D.Y. Chandrachud said on Thursday.

A bench led by the Chief Justice and comprising Justices J.B. Pardiwala and Manoj Mishra was hearing an application filed by Glas Trust Inc. against Byju’s resolution professional, Pankaj Srivastava, for removing the US lender from the committee of creditors. Glas has also pleaded for removal of the insolvency expert.

The top court asked the resolution or insolvency professional to maintain status quo in Byju’s bankcruptcy resolution. 

Also read | Why Byju’s creditors have dragged its insolvency professional to court

Before Srivastava removed the US lender from for committee of creditors, Glas Trust held the lion’s share of the claims, representing roughly 99% of Byju’s total debt.

Glas Trust has also opposed a settlement between the Board of Control for Cricket in India (BCCI) and Byju’s, insisting that as a financial creditor to the edtech firm its dues should be settled first. 

On 23 September, the Delaware Supreme Court upheld a decision declaring Byju’s to be in default on its $1.2 billion (about ₹11,000 crore) Term Loan B. Glas Trust represents a consortium of lenders that advanced the loan to Byju’s.

Byju’s owes its financial and operational creditors dues amounting to more than ₹15,000 crore. The list of creditors includes BCCI, Surfer Technologies, Coegent E Services, Teleperformance Business Services, OPPO, McGraw Hill Education India, Incred Financial Services, ICICI Bank, and Aditya Birla Finance.

‘Gross misconduct’

Senior counsel Kapil Sibal, appearing for Glas Trust, told the apex court that there had been ‘gross misconduct’ on the part of the resolution professional in removing the US creditor from the committee. 

The US lender informed the apex court that it had approached the Bengaluru bench of the National Company Law Tribunal on September 4 on the matter but did not get any relief since it was listed in the Supreme Court.    

Byju’s had entered into bankruptcy on 16 July when the NCLT admitted an insolvency petition by BCCI against Think & Learn Pvt. Ltd, the edtech firm’s parent company, for defaulting on dues worth ₹158 crore.

“My (Glas Trust’s) claims worth ₹11,000 crores was verified and thereafter duly admitted by Srivastava,” Sibal said, adding that that the grounds for the US lender’s removal were that certain documents were not provided to the resolution professional.

Tushar Mehta, solicitor general appearing for BCCI, opposed Glas Trust’s petition challenging Byju’s ₹158 crore settlement to the apex cricket board. 

Mehta said BCCI was “was not concerned about any adverse order in the current case” it was concerned about the “adverse consequences” the court’s order may have on the scope of settlements in insolvency matters.

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