BYJU'S caught in legal tangle in US; files suit against lenders in New York Court
The edtech company said in a statement, “On 3 March 2023, the TLB lenders unlawfully accelerated the TLB on account of certain alleged non-monetary and technical defaults. On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures including seizing control of BYJU’S Alpha and appointing its own management.”
- Jun 6, 2023,
- Updated Jun 6, 2023 9:03 AM IST
BYJU'S, an Indian edtech company, has taken legal action by filing a complaint in the New York Supreme Court against the acceleration of a US$ 1.2 billion Term Loan B (TLB) and the disqualification of Redwood. The move comes in response to what BYJU'S claims to be a series of predatory tactics employed by the lenders, led by Redwood.
The company made this move because they claim that the TLB lenders unlawfully accelerated their account and tried to take control over the BYJU’S entity BYJU'S Alpha by appointing their own management at the company. They TLB lenders also started litigation against BYJU’S in Delaware.
The edtech company said in a statement, “On 3 March 2023, the TLB lenders unlawfully accelerated the TLB on account of certain alleged non-monetary and technical defaults. On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures including seizing control of BYJU’S Alpha and appointing its own management.”
“Not resting content with this, the TLB lenders (acting through their agent, GLAS Trust Company) commenced litigation in Delaware in an attempt to lend credence to these actions. In the Delaware proceedings, the TLB lenders (unsuccessfully) attempted to deprive BYJU’S of its contractual right to ‘disqualify’ lenders engaged primarily in opportunistic trades,” the company added.
Apart from the TLB lenders, BYJU’s also has its grievances against Redwood, a lender known for trading in distressed debt. Redwood has been consistently increasing its stake in the TLB, aiming to profit from the situation.
BYJU'S noted that it has issued a notice disqualifying the Redwood entities, which would restrict their exercise of critical rights under the TLB.
It is worth noting that BYJU’S has stopped making further payments towards its Term Loan B, including the interest amount, claiming that the ongoing legal proceedings have led to the loan being disputed.
BYJU'S, an Indian edtech company, has taken legal action by filing a complaint in the New York Supreme Court against the acceleration of a US$ 1.2 billion Term Loan B (TLB) and the disqualification of Redwood. The move comes in response to what BYJU'S claims to be a series of predatory tactics employed by the lenders, led by Redwood.
The company made this move because they claim that the TLB lenders unlawfully accelerated their account and tried to take control over the BYJU’S entity BYJU'S Alpha by appointing their own management at the company. They TLB lenders also started litigation against BYJU’S in Delaware.
The edtech company said in a statement, “On 3 March 2023, the TLB lenders unlawfully accelerated the TLB on account of certain alleged non-monetary and technical defaults. On the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures including seizing control of BYJU’S Alpha and appointing its own management.”
“Not resting content with this, the TLB lenders (acting through their agent, GLAS Trust Company) commenced litigation in Delaware in an attempt to lend credence to these actions. In the Delaware proceedings, the TLB lenders (unsuccessfully) attempted to deprive BYJU’S of its contractual right to ‘disqualify’ lenders engaged primarily in opportunistic trades,” the company added.
Apart from the TLB lenders, BYJU’s also has its grievances against Redwood, a lender known for trading in distressed debt. Redwood has been consistently increasing its stake in the TLB, aiming to profit from the situation.
BYJU'S noted that it has issued a notice disqualifying the Redwood entities, which would restrict their exercise of critical rights under the TLB.
It is worth noting that BYJU’S has stopped making further payments towards its Term Loan B, including the interest amount, claiming that the ongoing legal proceedings have led to the loan being disputed.