look news india
A US court has dealt a fresh blow to troubled edtech firm Byju's. The Supreme Court of Delaware has found Indian edtech company Byju's guilty of defaulting on a $1.5 billion loan and has given it the right to compensate lenders.
Byju has now suffered a major setback from the US court. The Delaware Supreme Court on September 23 found Byju in default on his $120 million term loan. Due to this, Byju had to lose his US unit. A US court has upheld the decision of the Delaware Court of Chancery, which gave control of Byju's US subsidiary Alpha Inc. to lenders led by Glass Trust. Byju mortgaged it for a term loan.
A loan of $120 million was taken by mortgaging Alpha
Byju's was given a loan of $1.2 billion by 37 financial institutions. Under the terms of the loan, Glass Trust received the right to claim assets from the lenders if Byju's defaulted. When Byju's was unable to meet the terms of the loan, Byju's was given a notice of default in March 2023 and Glass Trust attempted to take control of Byju's Alpha Inc. In August 2023, a Delaware court ruled in favor of Glass and said that the lender was acting in accordance with the terms of the agreement.
Glass Trust has also filed a case in India
Glass Trust has filed suit for debts of $1.2 billion not only in the US but also in India, but was recently removed from the Committee of Creditors (CoC) under the ongoing bankruptcy proceedings in India. This decision was taken by Insolvency Resolution Professional (IRP) Pankaj Srivastava. He says that Glass Trust does not have the support of at least 51 percent of the lenders. The lenders have appealed against this decision in the Supreme Court.
