BYJU’S insolvency: IRP questions Glas Trust’s authority to represent US lenders

In the BYJU’S insolvency case, interim resolution professional (IRP) Pankaj Srivastava has reportedly indicated that US-based Glas Trust might lack the proper authority to represent the lenders claiming $1.3 billion from the edtech firm.

Srivastava, who was appointed by the National Company Law Tribunal (NCLT), informed Glas Trust on September 1 that most of the lenders it represents no longer hold business rights under their agreements with BYJU’S and therefore cannot make a claim, Reuters reported, citing a letter.

Srivastava has also requested that Glas Trust clarify its position and provide supporting documents, the report added.

Meanwhile, Glas Trust has reportedly petitioned the Bengaluru bench of the NCLT to have Shailendra Ajmera appointed as the new IRP, replacing Srivastava.

In its application to the NCLT filed on August 30, Glas Trust accused Srivastava of not adhering to the Insolvency and Bankruptcy Code (IBC), 2016, which mandates that the first meeting of the Committee of Creditors (CoC) be held within seven days of the CoC’s formation, TOI reported.

Section 9 of the IBC, 2016 allows operational creditors to initiate insolvency proceedings against a debtor for unpaid dues exceeding a specified amount.

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The insolvency-related events began on July 16 when the NCLT bench Bengaluru admitted a plea filed by the Board of Control for Cricket in India (BCCI), seeking to initiate a CIRP for BYJU’S parent company, Think and Learn Private Limited.

CIRP, which stands for Corporate Insolvency Resolution Process, is a legal process under the IBC, 2016, aimed at resolving insolvency issues faced by corporate debtors in a time-bound manner, typically through restructuring or liquidation.

Glas Trust, representing some of BYJU'S creditors, is contesting the National Company Law Appellate Tribunal’s approval of a Rs 158 crore settlement with the BCCI in the Supreme Court of India.

BYJU'S’ investors, including General Atlantic, Prosus, Peak XV, and Sofina, have also approached the apex court to address their concerns.

The edtech company, once riding high with a peak valuation of $22 billion in 2022, has seen its valuation decline by 99%.