Byju’s US lenders dropped from creditor committee – Times of India

MUMBAI: Even as the Supreme Court is in the midst of hearing Byju’s insolvency case, the cash-strapped startup’s US lenders and resolution professional Pankaj Srivastava seem to be headed for a bitter spat. While term loan lenders are seeking Srivastava’s replacement and recommended EY’s Shailendra Ajmera for the role, Srivastava has removed the lenders represented through Glas Trust Company from the committee of creditors for now and has admitted their claim as “contingent liability”, court filings showed.
Sources told TOI that on Tuesday morning, Srivastava sent an email to Glas notifying that it has been removed from the CoC. “Srivastava’s counsel informed the National Company Law Tribunal that he held the CoC meeting and that Srivastava was voted in as the permanent resolution professional at the meeting,” sources said. Text messages sent to Srivastava did not elicit any response. On Aug 21, the day the CoC was constituted, Glas was represented in the CoC, email exchanges between Srivastava and Glas showed.

A fresh application filed by Srivastava with the Bengaluru bench of the NCLT on Aug 30 – which was reviewed by TOI – showed that only Incred Financial Services, whose claims of Rs 20.3 crore amounted to only 0.18% of the CoC initially, has been verified as a financial creditor by Srivastava. Aditya Birla Finance has been reclassified as operational creditor in the revised list of claims while ICICI Bank has been removed as it admitted that there is no due payable. Srivastava cited ongoing legal proceedings involving Byju’s and the lenders in the US for their removal from CoC and assessed that Glas Trust does not meet the required lenders’ threshold necessary to maintain its claims against Byju’s.
Srivastava said that the acceleration of the $1.2-billion term loan by Byju’s lenders was not valid and the question of its validity is pending before various proceedings, both in India and the US. In June last year, Byju’s had moved the New York Supreme Court, challenging acceleration of the term loan repayment. The company had also sought to disqualify lender Redwood, who the firm had then alleged had purchased a significant portion of the loan.
“Corporate debtor’s (Byju’s) obligation to pay the term loan as guarantor would only arise upon failure of Byju’s Alpha to make payment upon a valid acceleration of the term loan. This issue is pending adjudication before various courts. Therefore, their claim has been admitted as contingent liability,” Srivastava said. He added that lenders holding about 61.4% of the term loan stand disqualified and unless a court declares the disqualification to be invalid, it appears that Glas would not have the authority to act for lenders in accordance with the credit agreement.
In a statement to TOI, a spokesperson for the steering committee of the term loan lenders said that Srivastava’s actions are unprecedented and entirely “illegitimate”.