Byju's Lenders Win Fight Over Loan Default, Control Of Unit
NDTV
Lenders have been pushing hard for the repayment of the $1.2 billion loan amid the company's mounting distress after a pandemic-era boom in online learning fizzled out.
Lenders to Byju's, once one of India's hottest tech startups, properly cited a default on a $1.2 billion loan when taking over control of a unit of the education-technology provider, a Delaware judge concluded.
The lenders - which include Redwood Investments LLC and Silver Point Capital LP - were within their contractual rights to replace a relative of company founder Byju Raveendran on the board of Byju's Alpha, a special-purpose company formed for financing purposes, with their nominee, Delaware Chancery Court Judge Morgan Zurn ruled.
Zurn rejected a complaint by Byju's that Timothy Pohl, tapped by lenders to oversee the special-purpose entity, was improperly authorized to take the reins. Pohl was "effectively seated" as the sole director of Byju's Alpha because of the defaults, the judge said in a 41-page ruling.
