Trouble mounts for Byju's as company's American arm files for bankruptcy

A Byju’s arm was put into bankruptcy in the US by a court-appointed agent who took over the shell company after it defaulted on $1.2 billion in debt.

Byju’s Alpha Inc. doesn’t have enough money to keep fighting with its parent company about the debt, according to a Bloomberg report. The lenders required the company to file bankruptcy before they would continue funding Byju’s Alpha, the Chapter 11 petition said.  

The company plans to sue a small hedge fund in Florida it has accused of wrongfully helping Byju’s parent hide more than $500 million in cash that should go to creditors, according to the filing. 
 
Byju’s Alpha listed assets of at least $500 million and liabilities of at least $1 billion in its bankruptcy petition. 

Lenders to Byju’s won a court fight in Delaware late last year that allowed them to appoint a new director — Pohl — to the financing unit. Since then, the lenders and Byju’s parent company have traded accusations in courts in Delaware and Florida, where the battle over the debt default has been carried out. 

Last month, the lenders filed an insolvency petition in India.

The US bankruptcy case is BYJU’s Alpha, Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).

Byju's major investors are seeking a reconstitution of the embattled edtech firm's board, including a change in leadership, at an upcoming extraordinary general meeting. "We are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board," the shareholders said in the statement.