 "BYJU’S faces a .2 billion lawsuit from lenders as founder disputes debt claims amid allegations of financial mismanagement.")
BYJU’S is facing legal challenges from US lenders represented by Glas Trust, who demand repayment of a $1.2 billion Term Loan B. The founder, Byju Raveendran, claims the company’s verified debt is only around Rs 20 crore, arguing this means he may not owe anything. However, the lenders insist that both Raveendran and the Insolvency Resolution Professional lack the authority to dismiss any lender’s claims. They also allege that key executives have left the company due to financial mismanagement, including a missing $500 million. The situation escalated with lawsuits filed in both the US and India, as BYJU’S disputes the lenders’ claims while asserting their rights under the loan agreement.
BYJU’S Legal Battle Intensifies Over $1.2 Billion Debt
In a significant development for BYJU’S, the Indian edtech giant is embroiled in a legal dispute with US lenders represented by Glas Trust. The controversy stems from a $1.2 billion Term Loan B that BYJU’S claims was wrongfully accelerated by the lenders in March 2023. According to BYJU’S founder, Byju Raveendran, the company’s verified debt stands at only Rs 20 crore, a claim disputed by the lenders.
The lenders argue that BYJU’S is required to repay the full amount of the loan along with interest, regardless of Raveendran’s assertions. They have filed lawsuits both in the US and India seeking recovery of the loan, which is claimed to have been mismanaged, including an alleged unauthorized transfer of $500 million out of the US.
The lenders’ committee expressed concern over the resignation of key personnel at BYJU’S, including the CEO and CFO, and highlighted the insolvency proceedings against the company. In response, BYJU’S has denied the allegations, maintaining its position on the legitimacy of its debt and the misinterpretations of loan agreements.
As the legal proceedings unfold, the future of BYJU’S, once touted as the most valuable edtech firm in India, remains uncertain. The outcome of this dispute could have major implications for its financial health and operational stability.
Tags: BYJU’S, Byju Raveendran, Glas Trust, Term Loan B, Edtech, legal dispute, debt recovery, insolvency, financial news
What is Byju’s claiming from the lenders?
Byju’s is claiming that the lenders should not demand a full repayment of the $1.2 billion loan.
Why are the US lenders countering Byju’s claim?
The US lenders believe that Byju’s should repay the entire loan amount, as they haven’t met the terms of their agreement.
How much money does Byju’s owe the lenders?
Byju’s owes a total of $1.2 billion to the US lenders.
What will happen if Byju’s doesn’t repay the loan?
If Byju’s doesn’t repay the loan, the lenders could take legal action or potentially seize assets to recover the money.
Is this situation common in the business world?
Yes, disputes over loan repayments and terms are common in the business world, especially in challenging financial situations.
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