Troubled education-technology startup Byju's is back facing a potential insolvency after India's top court ordered a stay on a ruling that allowed it to avert bankruptcy.
The Supreme Court stayed a lower court's ruling from last month, which allowed Byju's to exit insolvency by paying its debt to the country's cricket governing body. The nation's highest court is scheduled to next address the case on Aug. 23.
The halt means that the high-profile startup's insolvency proceedings can restart, at least until the Supreme Court further decides on the case. The pause is a small victory for US-based creditor Glas Trust Company, which had opposed the settlement with the cricket body and is itself seeking funds from Byju's.
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The Supreme Court's move was earlier reported by legal website Bar and Bench and confirmed by Mukul Rohatgi, a senior advocate representing Glas Trust. A representative for Byju's declined to comment immediately.
Earlier this month, an Indian companies' appeals court quashed an insolvency order issued by a lower court and ruled that Byju's can settle its case with the Board of Control for Cricket in India. The firm owed the cricket overseer 1.59 billion rupees ($19 million). The cricket body must now keep the money it's received from Byju's in a separate escrow account until further notice, the Supreme Court ruled.
Glas Trust, the trustee for lenders owed $1.2 billion, earlier asked a US bankruptcy judge to block Riju Ravindran, a brother of Byju's founder, from paying the cricket board. The US lenders are arguing his cash should be used to pay them, not debt owed to the Indian cricket body. Byju's lawyers have previously told courts that Ravindran is liquidating his assets to pay BCCI, and it's not the US creditors' money.
