**Byju’s Bankruptcy: NCLAT Dismisses Riju Raveendran’s Plea on Settlement**
The National Company Law Appellate Tribunal (NCLAT) has rejected a request from Riju Raveendran, the suspended director of the insolvent edtech company Byju’s, aimed at blocking creditors from making decisions regarding a ₹158 crore settlement with the Board of Control for Cricket in India (BCCI). This ruling from the NCLAT’s Chennai bench on Thursday represents a significant setback for both Riju and Byju Raveendran, the company’s founder, as it grants creditors full authority to determine the outcome of the settlement, excluding the promoters from the decision-making process.
Riju Raveendran’s plea contested a February 10 order from the Bengaluru bench of the National Company Law Tribunal (NCLT), which mandated that the BCCI present the settlement proposal to the committee of creditors (CoC) for approval, as part of efforts to facilitate Byju’s exit from insolvency. The NCLAT upheld the NCLT’s decision, stating that since the CoC was already formed when the settlement offer was made, it is now within the committee’s rights to accept or reject the proposal.
Key creditors, including Glas Trust LLC and Aditya Birla Finance, now hold the power to decide whether Byju’s can resolve its bankruptcy through the proposed out-of-court settlement. Glas Trust commands a substantial 99.41% voting share in the CoC, based on its admitted claim of ₹11,432 crore. Other members include Aditya Birla Finance, with a claim of ₹47 crore (0.41%), and Incred Financial Services Ltd, with a claim of ₹20 crore (0.18%).
Under the current insolvency process, Byju’s resolution professional, Shailendra Ajmera, is required to present the settlement proposal to the CoC. If 90% of the voting members approve it, the proposal can then be submitted to the NCLT for final approval. According to Section 12A of the Insolvency and Bankruptcy Code (IBC), the tribunal must sanction the withdrawal of insolvency proceedings if the CoC grants majority consent.
However, obtaining this approval may be challenging. Glas Trust has expressed opposition to the settlement, labeling the funds intended for BCCI as “tainted” and insisting that these resources should first be allocated to settle creditor dues. Convincing this dominant creditor to change its position will be a significant hurdle for the suspended promoters in their efforts to extricate the company from insolvency.
As a last resort, the Byju brothers may consider appealing to the Supreme Court to keep creditors from participating in the settlement decision-making process.
Byju’s insolvency case was initiated on June 16, 2024, following the company’s failure to make a ₹158 crore payment to BCCI under a jersey sponsorship agreement. The edtech giant had entered into this deal in 2019, extending it until November 2023, but payment defaults prompted BCCI to commence insolvency proceedings.
**FAQ**
**What is the current status of Byju’s bankruptcy proceedings?**
Byju’s bankruptcy proceedings are ongoing, with the NCLAT ruling that creditors have the authority to decide on a ₹158 crore settlement with BCCI, sidelining the company’s promoters from the decision-making process.