US court backs lenders' action in Byju's Alpha

The Byju’s lenders’ consortium appointed a director on an SPV that borrowed $1.2 billion for the edtech giant in the US, and removed Riju Raveendran from the SPV’s board

- Varun Sood

A court in Delaware has ruled that there was nothing wrong in a Byju’s lenders’ consortium appointing a director on a special purpose vehicle (SPV) that borrowed $1.2 billion (nearly ₹10,000 crore today) for the online tutoring company in the US, and removing Riju Raveendran, the brother of the edtech giant’s founder, from the SPV’s board.

The ruling is significant because the case filed by Glas Trust Co., the trustee representing 37 lenders, against the Indian company in Delaware was the first court case that sparked two related courtroom battles in New York and Miami.

“The plaintiffs in this action, Glas Trust Co. and Timothy Pohl, filed a complaint against defendants Riju Ravindran, Byju’s Alpha, Inc., and Tangible Play Inc. Plaintiffs seek a declaration that Glas validly removed Ravindran as Byju’s Alpha’s sole director and officer, and that it validly appointed Pohl as Byju’s Alpha’s director and officer, among other things. Following a half-day trial on a paper record, I conclude that Pohl is indeed Byju’s Alpha’s sole director and officer," Delaware chancery court judge Morgan Zurn pronounced in an order dated 2 November.