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A US judge refused to block a debt payment designed to free Byju’s from an insolvency case in India, telling American lenders to take their complaints about the transaction to a court in the home country of the educational tech firm.
US Bankruptcy Judge Brendan Shannon rejected a lender request to block Riju Ravindran, brother of Byju’s founder, from paying more than $19 million to India’s governing board for cricket. A deal to clear the debt enabled Byju’s to win dismissal of an insolvency case in front of a judicial tribunal in India.
“I am deeply concerned that I am being asked for relief that would frustrate proceedings in another country,” Shannnon said, referring to ongoing court fights in India between lenders and Byju’s.
GLAS Trust Company, the trustee for lenders owed $1.2 billion, had argued that any money Ravindran uses to pay Byju’s debts should go to them instead.
The lenders were trying to convince Shannon to overrule an India court, which had already heard several days of arguments about the payment dispute, said Sheron Korpus, a lawyer for Ravindran.
Giving lenders what they want “would be an unimaginable insult to the system in India,” Korpus told Shannon during a court hearing held by video. What the lenders were really trying to do was keep alive a bankruptcy case in India started by the cricket board, he said.
The lenders are on the cusp of winning a judgment in a US court against Ravindran, who has been accused of helping hide $533 million while he was a director of a Byju’s unit incorporated in Delaware. US Bankruptcy Judge John Dorsey has already ruled against Ravindran on a number of issues and concluded the Byju’s manager was either “untruthful” or “the most incompetent officer or director of a company in Delaware’s history.”
GLAS recently tried unsuccessfully to convince the National Company Law Appellate Tribunal in India to block Ravindran from paying off the cricket board.
The appeals tribunal in India sided with Ravindran and quashed an insolvency order issued by a lower court.
Ravindran has been at the center of a nearly two-year-old fight over the $533 million, which lenders say should be returned to them after the company defaulted. Ravindran hinted in court filings that the money was spent, but has failed to provide enough documentation to verify the claim.
The missing money is at the heart of a dispute between lenders owed $1.2 billion and the startup founded by entrepreneur Byju Raveendran. The cash belongs to a bankrupt shell company, Byju’s Alpha Inc., which is affiliated with Think & Learn and was taken over by the lenders after their loan defaulted.
The US bankruptcy case is BYJU’s Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).
More stories like this are available on bloomberg.com
