More trouble for BYJU’S: Company faces lawsuit in the US

Indian edtech major BYJU’S seems to have landed itself in serious trouble in the US. Alpha Inc, one of BYJU’S companies in the US, has been sued in the Delaware court in relation to recovery of $1.2 billion.

Alpha Inc faces a lawsuit from an agent acting on behalf of lenders who are owed $1.2 billion, according to a report from Bloomberg. 

The suit was lodged by Glas Trust Company and investor Timothy R. Pohl, naming BYJU'S Alpha, Tangible Play, Inc., and Riju Ravindran as defendants. Ravindran is the director of Alpha Inc, Bloomberg noted. The lawsuit has been filed as Glas Trust Company vs Riju Ravindran, 2023-0488, Delaware Chancery Court (Wilmington).

It is worth noting that specific reasons for the lawsuit and the objectives of Glas Trust and Pohl remain undisclosed as these details were redacted from court documents. 

Moreover, a telephonic hearing was slated for Thursday by a judge in Wilmington, Delaware, to ascertain if the lawsuit needs expedited proceedings. Notably, Delaware Chancery Court Judge Morgan Zurn rejected the request by Byju's and Ravindran to keep the hearing's content confidential. Judge Zurn, in a public filing, underlined the necessity of court transparency.

Earlier this year, a proposal by the company to revise its debt by increasing the interest rate on its $1.2 billion term loan due 2026, faced resistance from lenders. A lenders' steering committee suggested an alternate plan of repaying part of the loan and securing cash.

Furthermore, regulators in India recently conducted a raid at BYJU’S offices, seizing documents and digital data. Raveendran, in a subsequent letter to employees, defended the company stating that all overseas acquisitions were paid for through regular banking channels with complete documentation.

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