Seeks to Protect and Maximize Value of BYJU’s U.S.-Based Operating Entities for the Benefit of All Stakeholders and Prevent Further Diversions of Assets and Corporate Mismanagement
Action Follows BYJU’s Numerous Events of Default on the Term Loan B Since November 2022 and Defiance of Court Orders to Disclose Location of $533 Million in Fraudulently Transferred Loan Proceeds from BYJU’s Alpha
Filing of Involuntary Chapter 11 Petitions Intended Not to Disrupt Epic!, Neuron Fuel, and Tangible Play From Continuing to Operate in Normal Course
Stakeholders Can Share Their Views Securely and Anonymously by Visiting www.ByjusBankruptcy.com
NEW YORK–(BUSINESS WIRE)–The ad hoc group of term loan lenders (the “Ad Hoc Group” or “Lenders”) of BYJU’s Alpha Inc. (“Borrower”) US$1.4 billion term loans (“Term Loans”) announced today that certain holders of the Term Loans and GLAS Trust Company LLC (as administrative agent and collateral agent of the Term Loans) have filed petitions pursuant to Chapter 11 of the U.S. Bankruptcy Code to initiate involuntary Chapter 11 proceedings against Epic!, Neuron Fuel (DBA Tynker), and Tangible Play (DBA Osmo), the three U.S.-based guarantors of the Term Loans (collectively, the “U.S. Guarantors”), in the United States Bankruptcy Court for the District of Delaware (the “Court”).
The Lenders issued the following statement: “Since BYJU’s began to default on its Term Loan obligations shortly after we provided BYJU’s Alpha with financing in 2021, we have made every effort possible to work productively and collaboratively to help BYJU’s cure its multiple defaults. However, it is clear that BYJU’s management has no intention or ability to honor its obligations under the Term Loans. Indeed, BYJU’s founders, who also serve as the three directors of the overall enterprise—Byju Raveendran, Riju Ravindran, and Divya Gokulnath—unlawfully diverted $533 million in loan proceeds, the whereabouts of which are still unknown.
“As a result of BYJU’s failed leadership and mismanagement, significant harm has been done to BYJU’s businesses and the value of the Company’s assets. Shareholders and lenders to the Company have seen the value of their investment deteriorate, employees and vendors have not been paid in a timely manner, and customers have suffered.
“Among other important goals, we have taken this action to protect and preserve the value of Epic!, Neuron Fuel, and Tangible Play. We remain committed to their success and stand ready to infuse the capital necessary to reorganize the businesses. Under supervision of the Court, the Lenders hope that Epic!, Neuron Fuel, and Tangible Play will benefit from much needed oversight while a plan is developed to maximize the value of these assets for the benefit of all stakeholders.”
To assist in the Lenders’ efforts, the Lenders invite former employees, students, and vendors of Epic!, Neuron Fuel, and Tangible Play to anonymously share their experiences, including whether they are owed any outstanding debt, in dealing with these businesses and their leadership by visiting www.ByjusBankruptcy.com.
Key Background and Timeline
Contacts
Nathaniel Garnick/Sam Fisher
Gasthalter & Co.
+1 (212) 257-4170
byjus-lenders@gasthalter.com
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