‘No settlement with out backing of Byju’s collectors’

BENGALURU: The Nationwide Firm Legislation Appellate Tribunaldismissed makes an attempt by Byju’s founder Byju Reveendran’s brother Riju Ravindran and cricket physique BCCI to withdraw insolvency proceedings towards the edtech agency with out creditor approval.This choice reinforces the authority of the committee of collectors (CoC) in thecorporate insolvency case.
NCLAT upheld an earlier choice by the Bengaluru bench of the Nationwide Firm Legislation Tribunal (NCLT), which declined to right away approve the out-of-court settlement between BCCI and Byju’s. The appellate tribunal acknowledged that for the reason that settlement proposal got here after the formation of the CoC, it can not proceed with out the consent of 90% of the creditor group, in step with Sec 12A of Insolvency and Chapter Code.
The CoC contains GLAS Belief, a US-based trustee representing lenders to whom Byju’s owes $1.2 billion, and Aditya Birla Finance. Primarily based on admitted claims, GLAS Belief holds a 99.4% voting share within the committee.
The case stems from a sponsorship dispute involving BCCI, which filed an insolvency plea final 12 months over unpaid dues of Rs 158.9 crore tied to a 2019 workforce sponsorship settlement.
Although NCLAT briefly stayed insolvency proceedings in Aug 2024 after a settlement was proposed, that ruling was overturned by the SC in Oct following objections from GLAS Belief. The lender alleged that the funds provided for settlement by Ravindran had been questionable and must be directed towards broader debt obligations.
Ravindran and BCCI argued that their withdrawal software was submitted earlier than the CoC was shaped. Nevertheless, the tribunal discovered that Kind FA – the official software for withdrawal – was filed on Nov 14, 2024, by which era the CoC had already been constituted. Consequently, the applying triggers obligatory creditor consent.