The U.S. branch of Indian educational technology startup Byju’s, known as Byju’s Alpha, has filed for Chapter 11 bankruptcy protection in a Delaware court, citing liabilities ranging from $1 billion to $10 billion. According to court documents, Byju’s Alpha listed its assets between $500 million and $1 billion, with estimated creditors numbering between 100 and 199.
Byju’s Alpha Inc. lacks the financial means to continue its legal disputes with its parent company over debt obligations, as reported by Bloomberg. The lenders insisted on bankruptcy filing before providing further funding to Byju’s Alpha, as stated in the Chapter 11 petition.
Additionally, the company intends to take legal action against a small hedge fund in Florida, accusing it of assisting Byju’s parent company in concealing over $500 million in cash that rightfully belongs to creditors, as outlined in the filing.
Meanwhile, there are concerns among some investors regarding the financial stability of Byju’s under the leadership of Byju Raveendran. They have called for a change in management and requested an Extraordinary General Meeting (EGM) to address various financial issues and advocate for the involvement of Think and Learn’s founders in the company’s leadership. Presently, Byju Raveendran, his wife Divya Gokulnath, and brother Riju Raveendran are members of the board of directors. This marks the third instance of investors issuing notices against Byju Raveendran, leading to an EGM.
Byju’s Alpha’s bankruptcy petition disclosed assets of at least $500 million and liabilities of at least $1 billion. Last year, lenders to Byju’s secured a court victory in Delaware, enabling them to appoint a new director to the financing unit. Subsequently, both the lenders and Byju’s parent company engaged in legal battles in courts across Delaware and Florida regarding the debt default. Recently, the lenders filed for insolvency in India.
