Epic! Creations: Trustee-Run Chapter 11 Asset Sales

An ad hoc group of term loan lenders and agent GLAS Trust Company filed involuntary chapter 11 petitions against three U.S.-based education technology companies on June 4, 2024, in the U.S. Bankruptcy Court for the District of Delaware. The debtors — Epic! Creations (now Saga Formations, Inc.), Neuron Fuel (doing business as Tynker), and Tangible Play (doing business as Osmo) — were all subsidiaries of India-based ed-tech company Byju's and served as guarantors on a ~$1.2 billion term loan that Byju's Alpha secured in November 2021.

The trustee-administered liquidation generated nearly $100 million in asset sales but left prepetition term loan creditors with an estimated 2% to 5% recovery. The court appointed a chapter 11 trustee after the debtors failed to comply with discovery obligations, and the trustee then ran the estates through a sale process, plan confirmation on October 29, 2025, and a post-confirmation wind-down focused on retained litigation against Byju's founder Byju Raveendran and related entities.

Debtor(s)	Saga Formations, Inc. (f/k/a Epic! Creations, Inc.) and two jointly administered entities (Pajeau, Inc. f/k/a Neuron Fuel, Inc.; Tangible Play, Inc.)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-11161
Petition Date	June 4, 2024
Judge	Hon. Brendan L. Shannon
Confirmation Date	October 29, 2025
Plan Administrator	Timothy R. Pohl

Byju's Acquisition Spree and the Path to Involuntary Filing

Byju's built its U.S. footprint through a series of acquisitions during the pandemic-era ed-tech boom. The company acquired Epic for $500 million in 2021, a K-8 digital reading subscription platform reportedly used in more than 80% of U.S. public elementary schools by 2023. In the same year, Byju's purchased Tynker for approximately $200 million. Tangible Play, the maker of Osmo-branded educational gaming products, had been acquired earlier for $120 million in 2019. At its peak, Byju's carried a valuation of $22 billion.

The debt structure at the center of the case traced back to a November 2021 term loan borrowing of approximately $1.2 billion through Byju's Alpha, with the three U.S. entities tied in through joinders and guarantees. Lenders accused Byju's founders of improperly diverting $533 million in loan proceeds away from Byju's Alpha. The lenders alleged that Byju's broke the terms of its loans by failing to provide timely financial information and disregarding its loan obligations.

The involuntary petitions were filed by petitioning creditors including HPS, TBK Bank, and Midtown Acquisitions, among others. The lenders stated their actions were "not intended to disrupt" the operations of the three education companies and that they stood ready to infuse capital necessary to reorganize the businesses.

Trustee Appointment and Estate Control

On September 16, 2024, the court entered an order for relief and directed the appointment of a chapter 11 trustee. The trustee appointment was a default sanction tied to the debtors' failure to comply with discovery obligations. The U.S. Trustee appointed Claudia Z. Springer, and the joint administration order had already consolidated the three cases on June 27, 2024.

The trustee appointment shifted control of the estates, litigation, financing, and sale process away from the debtors' management. The trustee's subsequent investigation identified alleged siphoning of assets, disputed control over debtor assets and applications, and transactions involving Byju Raveendran, related entities, and the Voizzit parties. Those findings became part of the retained-causes architecture preserved through confirmation.

Key professionals. By the plan stage, the estate-professional roster included Jenner & Block LLP as bankruptcy co-counsel, Pashman Stein Walder Hayden, P.C. as Delaware bankruptcy counsel, Quinn Emanuel Urquhart & Sullivan LLP as special counsel, Novo Advisors LLC as accountants and financial advisors, The Law Offices of Panag & Babu as Indian local counsel, FTI Consulting as investigative and financial advisor, SC&H Group as investment banker for the Neuron Fuel and Tangible Play sales, and Moelis & Company as investment banker for the Epic sale.

DIP Financing and Cash Collateral

The trustee sought authority to use cash collateral and obtain postpetition financing with up to $19 million of new-money DIP loans, including $5 million available on an interim basis. The structure included a roll-up mechanism capped at approximately $133 million, with lenders able to elect a 7.00x roll-up multiple — seven dollars of prepetition debt for each dollar of new money funded.

The proposed economics included interest at Term SOFR plus 10.00% per annum, with a cash-pay strip of Term SOFR plus 1.00% and the balance payable in kind, plus a 6% PIK backstop fee and a 4% exit fee on new-money DIP loans.

The final DIP order, entered on November 20, 2024, approved a $19 million new-money facility comprised of $9.5 million of final new-money DIP loans and an uncommitted $9.5 million accordion, together with roll-up loans up to $133 million at a 7.00x multiple. The final order also granted adequate protection liens, adequate protection superpriority claims, and payment of reasonable documented adequate-protection fees and expenses for prepetition secured parties.

DIP milestones. The financing was structured around a rapid sale path: Epic bids by December 16, 2024; Epic auction by December 18, 2024; Epic sale order by December 23, 2024; Neuron Fuel and Tangible Play bid deadline by January 16, 2025; Neuron Fuel and Tangible Play sale consummation by January 31, 2025; and an acceptable plan effective date by March 31, 2025.

Asset Sale Process and Outcomes

All three estates proceeded through asset sales rather than reorganization. The bid procedures order was entered on January 28, 2025.

Epic sale. Moelis marketed Epic to 117 potential acquirers. Fifty-eight parties signed NDAs, 10 submitted indications of interest, and 5 submitted written bids. After a multi-day auction, Hy Ruby Limited — a subsidiary of China's TAL Education Group — emerged as the successful bidder at $95.1 million. The Epic sale order was entered on May 20, 2025, approving the sale free and clear of liens, claims, interests, and encumbrances. The sale faced a last-minute issue when the U.S. Department of Justice raised concerns that the acquisition could be subject to a CFIUS review, though the court ultimately approved the transaction. The Epic sale closed on May 27, 2025.

Tynker sale. SC&H contacted 159 potential acquirers for Neuron Fuel. Thirty-two signed NDAs, 30 conducted diligence, and 2 submitted written bids. After a 48-round auction, Tynker Holdings, LLC — the entity through which CodeHS CEO Jeremy Keeshin bid — emerged as the successful bidder with total stated value of $2,310,000, including $2,150,000 cash, cure-cost assumption, and $160,000 of non-cash consideration. The Neuron Fuel sale order was entered on May 20, 2025, and the sale closed on May 30, 2025. Byju's had acquired Tynker for $200 million in 2021.

Tangible Play. Tangible Play did not attract a viable operating-platform bid during the marketing phase. The trustee concluded the business had no path forward and ceased operations in April 2025. A later motion sought approval to sell Tangible Play's remaining intellectual property and related ancillary assets to Play Osmo Inc. for $825,000, excluding retained causes of action and certain cash. The court approved that sale on November 21, 2025, finding Play Osmo to be a good-faith buyer. No executory contracts were assumed or assigned in that transaction.

Cumulative historical asset sales reached $95,733,440 according to the January 2026 monthly operating report.

Plan Confirmation and Wind-Down Structure

The confirmed plan established a wind-down framework rather than a reorganized operating business. The confirmation findings identify Class 3 prepetition term loan claims as the voting impaired class, with an estimated recovery range of 2% to 5%.

Timothy R. Pohl was approved as plan administrator. Under the plan supplement and confirmation findings, he serves from the effective date as the sole director and officer of the wind-down debtors, exercising plan-administrator powers subject to the Wind-Down Debtors Oversight Committee.

On the same day as confirmation, the court approved a settlement with Amazon requiring Amazon to pay $638,927 to the trustee. The settlement provided mutual releases tied to the Amazon commercial relationship and the bankruptcy cases, but carved out obligations created by the settlement agreement itself. Amazon's release did not extend to non-debtor entities.

By January 2026, the estates were operating in a cash-basis wind-down posture: zero full-time employees, minimal current-month income, and disbursements directed primarily to professional fees.

Retained Litigation and Excluded Parties

The confirmation order preserved retained causes of action for the wind-down estates and made clear that claims against excluded parties were not released.

The retained-causes architecture expressly captured claims tied to alleged asset siphoning, Alpha-related funds, and fiduciary-duty theories identified in the trustee's investigation. The second amended plan repeatedly ties the retained-causes strategy to Byju Raveendran, related T&L entities, the Voizzit entities, and disputed transfers or control over debtor assets.

Lenders had previously filed a lawsuit in the U.S. alleging that Raveendran, his wife Divya Gokulnath, and former executive Anita Kishore executed a scheme to hide $533 million in funds from the term loan proceeds. A Delaware court also found that Raveendran had violated his fiduciary responsibilities as a director of Alpha.

Frequently Asked Questions

What happened to Epic, Tynker, and Osmo in the Byju's bankruptcy?

All three companies were sold through the chapter 11 process. Epic was acquired by Hy Ruby Limited (TAL Education Group) for $95.1 million, Tynker was acquired by CodeHS (through Tynker Holdings, LLC) for $2.31 million, and Tangible Play's remaining intellectual property was sold to Play Osmo Inc. for $825,000. Byju's had originally paid $500 million for Epic, $200 million for Tynker, and $120 million for Tangible Play.

Why was a chapter 11 trustee appointed?

The court directed the U.S. Trustee to appoint a chapter 11 trustee on September 16, 2024. The appointment was a default sanction tied to the debtors' failure to comply with discovery obligations. The trustee then took control of the estates, including the sale process and litigation strategy.

What recovery will creditors receive?

The confirmed plan estimates that Class 3 prepetition term loan creditors will receive a 2% to 5% recovery. Additional recoveries could come from the prosecution of retained causes of action against excluded parties, including claims related to alleged asset siphoning and fiduciary-duty violations.

Who is the claims agent for Epic! Creations (Saga Formations)?

Verita Global serves as the claims, noticing, and voting agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more coverage of education-sector restructurings and chapter 11 cases, visit the ElevenFlo blog.