An agency suing Alpha Inc on behalf of lenders who are owed $1.2 billion has filed the complaint. The defendants named in the lawsuit are BYJU’S Alpha, Tangible Play, Inc., and Riju Ravindran. It was filed by the Glas Trust Company and investor Timothy R. Pohl. The director of Alpha Inc. is Ravindran.
The Indian edtech giant BYJU’S appears to be in big danger in the US. One of BYJU’s US businesses, Alpha Inc, has been sued in a Delaware court in an effort to recover $1.2 billion.
According to a Bloomberg story, an agent representing lenders who are owed $1.2 billion has filed a lawsuit against Alpha Inc.
The defendants named in the lawsuit are BYJU’S Alpha, Tangible Play, Inc., and Riju Ravindran. It was filed by the Glas Trust Company and investor Timothy R. Pohl. According to Bloomberg, Ravindran is the director of Alpha Inc. The case has been filed in Wilmington, Delaware’s Chancery Court, as Glas Trust Company vs. Riju Ravindran, 2023-0488.
It is important to note that the goals of Glas Trust and Pohl have not been made public because these specifics have been withheld from court filings.
A judge in Wilmington, Delaware also scheduled a telephone hearing for Thursday to determine whether the complaint requires expedited court proceedings. Notably, Byju and Ravindran’s plea to keep the details of the hearing secret were denied by Delaware Chancery Court Judge Morgan Zurn. In a public filing, Judge Zurn emphasized the importance of court transparency.
The root of the entire problem is that the leading provider of edtech was unable to repay its loans and was forced to renegotiate its credit agreement as a result of a violation of investor rights including the failure to meet the deadline to disclose yearly financial results.
Then, early this year, lenders rejected the company’s plan to restructure its debt by raising the interest rate on its $1.2 billion term loan due in 2026. An alternative strategy for repaying a portion of the debt and obtaining funding was proposed by a steering committee of lenders.
Additionally, regulators in India recently raided BYJU’s headquarters and seized papers and digital material. In a subsequent letter to staff, Raveendran defended the business by noting that all foreign purchases were funded using conventional banking channels with complete documentation.
