Byju’s US affiliates slapped with involuntary bankruptcy cases from creditors

A group of creditors led by US-based HPS Investment Partners has filed involuntary Chapter 11 bankruptcy cases against three firms previously connected to beleaguered Indian edtech giant Byju’s, Bloomberg reported.

Neuron Fuel Inc., Epic Creations Inc., and Tangible Play Inc. were formerly affiliated with Byju’s US unit Alpha, which had voluntarily filed for Chapter 11 bankruptcy proceedings earlier this year.

Involuntary bankruptcies require implicated firms to follow court orders or dispute accusations in court. Redwood Capital Management, Veritas Capital, and loan agent Glas Trust have similarly filed bankruptcy petitions against Alpha’s ex-affiliates.

According to media reports, Glas Trust has taken control of Byju’s Alpha since March 2023 after the latter defaulted on its loan.

As part of its initial expansion to the US, Byju’s bought Tangible Play, the California-based operator of game developer Osmo, in 2019. At the height of its valuation in 2021, Byju’s acquired Neuron and Epic. But by November 2023, the edtech firm sought to sell Epic.

Once valued at US$22 billion, Byju’s valuation is now at just US$230 million as it seeks to restructure its operations amid questions over its financial capacities and corporate governance.

The new slew of cases is the latest in a lengthy list of legal battles involving the company, including a disputed US$533 million worth of cash.

Byju Raveendran took over day-to-day operations in April despite investor calls to oust him and his wife, Divya Gokulnath, from leadership roles in the company they co-founded in 2011.

See also: Charting Byju’s 99% fall in valuation