US Supreme Court finds Byjus guilty of loan default: Delaware Supreme Court says Byjus defaulted on $1.5 billion term loan
The Delaware Supreme Court of America has upheld the decision holding Byju’s guilty of defaulting on a $1.5 billion loan. Due to this, the problems of Byju’s, an edtech company facing financial crisis, may increase. In fact, while giving its verdict, the Chancery Court had considered Byju’s as a defaulter of $1.2 billion.
Now the Delaware Court has also approved this decision. Byju’s lenders, through their administrative agent Glass Trust, filed a case in the ‘Delaware Court of Chancery’, in which they accused Byju’s of not making payments under the loan agreement.
After the decision of the Delaware Court, Byju’s lenders can now demand their entire amount back. He can also take control of Byju’s US company Byju’s Alpha Inc.
The committee of term loan lenders said – Byju’s deliberately violated the loan agreement. According to the statement of the steering committee of the group of term loan lenders, Byju’s founder and CEO Byju Raveendran and his brother Riju Raveendran themselves have admitted that Byju’s has committed till October 2022. There was delay in loan payment.
The committee said – We are pleased that the Supreme Court of Delaware has decisively confirmed what we already knew. That Byju’s knowingly violated the loan agreement and did not honor it.
Delaware Court’s decision has no impact on India’s proceedings. After getting a blow from Delaware Court, Byju has issued a clarification. The company has said that the Delaware Court’s decision will have no impact on the ongoing proceedings in India. The legality of the Glass Trust’s action is still pending in the New York Supreme Court. Glass is not a member of the CoC in the insolvency process of Think & Learns, nor does Glass have any legal status in the US nor any rights in India.
