Byju’s transferred funds in violation of bankruptcy rules via shell company: Report

Byju's, the embattled tech company controlled by Indian entrepreneur Byju Raveendran, has been accused of illegally transferring funds from its U.S. affiliate, according to a lawsuit filed on Tuesday in a Delaware federal court, Bloomberg reported. The lawsuit claims money that should have been used to pay creditors was funnelled to Whitehat Education Technology. Court-appointed trustee Claudia Springer, a bankruptcy attorney, is seeking the return of nearly $700,000 allegedly transferred from accounts under her control, per the Bloomberg report.This legal battle is part of a broader conflict between Byju's and its lenders, who claim the edtech company owes more than $1.2 billion to them. For over a year, lenders have been trying to locate $533 million they say the company hid from them, as per the report. The dispute stems from a Byju’s affiliate that once held the missing $533 million, which creditors took over and placed in Chapter 11 bankruptcy. Three other units were also forced into insolvency and placed under Springer's control. All U.S.-based affiliates are currently in bankruptcy court in Wilmington, Delaware, while Byju’s faces separate bankruptcy proceedings in India, as per the report.