Kerala HC Summons Byju's RP, EY India Head, Glas Trust Representative in Ongoing US Asset Dispute

The Kerala High Court has reportedly summoned crisis-hit Byju’s resolution professional Shailendra Ajmera, EY India chairman Rajiv Memani, and a representative from Glas Trust to appear on December 5, according to The Economic Times report.

The summons stem from a petition by Voizzit Technology, which asserts ownership over the edtech platform’s overseas assets, including Epic! And Tynker. This came after the high court barred the resolution professional, and lenders in May from disposing of the two overseas assets.

Despite this restriction, US bankruptcy lawyer Claudia Springer, who oversees the insolvency of Byju’s American units, is reported to have proceeded with their auction. Earlier in June, the two companies, previously bought by Byju’s, were sold off by the edtech platform’s consortium of lenders.

Tynker has been sold to CodeHS for $2.2 million, marking a near-total wipeout in value from the $200 Mn Byju's paid just three years ago. Epic! met a similar fate, fetching $95 million from TAL Education Group, far below the $500 million price tag the edtech unicorn had agreed to in 2021.

These two American assets were sold for a much lesser amount than Byju’s paid for their acquisitions. The two fire sales were part of Byju’s bankruptcy process in the US, which involved an unpaid term loan of $1.2 billion.

Byju's Costly American Dream

A group of lenders from the $1.2 billion loan consortium to Byju’s had earlier approached a US court seeking bankruptcy proceedings for three of the edtech firm’s American subsidiaries --- Epic, Tynker, and Osmo. These entities had served as guarantors for the term loan B, which Byju’s secured through it subsidiary, Byju’s Alpha, in 2021.

The lenders are pushing for a court-supervised restructuring under Chapter 11 of the US Bankruptcy Code, even as they remain locked in parallel litigation with Byju’s in US courts over issues surrounding the same loan.

Byju’s had acquired the three subsidiaries prior to taking on the debt and has since struggled to divest them — particularly Epic, which has been on the block for months. However, the long-going disputes with lenders and certain investors stalled potential deals, materialised now.

Prior to this, the lenders also filed a lawsuit in the US against Byju’s founder Byju Raveendran, his wife Divya Gokulnath, and former company executive Anita Kishore. The lawsuit alleged that the trio execute a scheme to hide $533 million in funds from the money they had lent to Byju’s Alpha.

A Delaware Bankruptcy also indicated that multiple fraudulent transfers had taken place at the edtech company. The court found that Raveendran had reportedly violated his fiduciary responsibilities as a director of the US entity, Alpha.

The legal case is part of a wider insolvency and financial debacle: Byju’s US arm filed for Chapter 11 in February 2024, auditors have resigned, the parent firm is under insolvency proceedings in India, with nearly every corner of its governance and expansion plans under scrutiny. The edtech company, which was once valued at $22 billion in March 2022, has fallen to nearly $1 billion valuation.