Glas Trust moves Supreme Court against Byju's resolution professional

A committee of creditors (CoC) is a group of lenders who make decisions about an insolvent company or borrower in the insolvency resolution process

US-based creditor Glas Trust Company LLC on Tuesday told the Supreme Court that it has been wrongly removed from the Committee of Creditors (CoC) by the Interim Resolution Professional (IRP) dealing with the insolvency proceedings against the beleaguered edtech firm Byju's.

The submissions were made by senior advocate Kapil Sibal, appearing for the US firm, before a Bench comprising Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra, which commenced the hearing in the keenly contested case.

A CoC is a group of lenders who make decisions about an insolvent company or borrower in the insolvency resolution process. 

 

Glas Trust told the apex court that their removal from the list of creditors has brought down its claims from 99.41 per cent to zero.

They said they had claims of over Rs 11,000 crore.

“After verifying he has disqualified us and the person who has 0.59 per cent (is there),” Sibal said. 

Glas Trust told the apex court that they were disqualified for not supplying certain documents to the IRP. 

They said the RP had rescheduled the CoC meeting without telling them.

"According to Section 22(1) of the Insolvency and Bankruptcy Code, IRP had to hold a meeting on August 27. He adjourned it to September 3 without informing us," Sibal said. 

Byju's, represented by Senior Advocate NK Kaul, told the court that the petitioners in the matters are only hedge funds internationally dealing with stressed assets.

“These are people who recalled a loan three and a half years before it was due on a technical difficulty. This was challenged in the New York courts, which has exclusive jurisdiction, and the matter is pending in the New York court. When the settlement was being arrived at, they moved the petition before the Delaware courts for a TRO (temporary restraining order) action as your Lordships are well aware,” he said.

“So all these people come before this court and say all this bogey saying they are defaulters; they are fleeing the country. Who is fleeing the country? In the last one year we have come to India 10 times. Not one Interpol notice, not one ED complaint. Only technical defaults on FEMA are pending," he added. 

He explained that they had nothing to do with the settlement money with the Board of Control for Cricket in India (BCCI) as it was personal, tax paid money. 

Glas Trust moved the Bengaluru Bench of the National Company Law Tribunal (NCLT) on September 4 seeking a stay on the proceedings of the CoC from which it was expelled. 

However, the NCLT deferred the hearing saying that it cannot stop the proceedings of CoC as the go-ahead for its constitution and for conducting the meetings were given by the Supreme Court.

The NCLT Bench said that the lender can file a separate application for pursuing the matter if the case doesn’t come before the apex court till September 11.

The Supreme Court said it will hear the matter on September 18. 

Pankaj Srivsatava, the IRP, removed Glas Trust from the CoC, claiming that they do not represent the minimum of 51 per cent of lenders in the consortium, sources said.