Byju's Goes To Court; Files Lawsuit Against Lender In New York
Education technology company Byju's has taken legal action by filing a complaint in the New York Supreme Court against the acceleration of its USD 1.2 billion Term Loan B (TLB) and the disqualification of Redwood. Byju's alleges that the lenders, led by Redwood, have engaged in predatory tactics."
According to Byju's, the TLB lenders have allegedly unlawfully accelerated the loan, citing non-monetary and technical defaults. Consequently, the lenders have taken control of BYJU'S Alpha and installed their own management. In response, BYJU'S has initiated legal proceedings in Delaware to challenge the lenders' actions and protect its contractual rights.
In addition to the TLB lenders, Byju's has expressed concerns about Redwood, a lender known for trading distressed debt. Redwood has been steadily increasing its stake in the TLB, seemingly aiming to benefit from the situation. To address this, BYJU'S has issued a notification disqualifying the Redwood entities, thereby limiting their exercise of critical rights under the TLB.
Due to the ongoing legal proceedings and the loan dispute, BYJU'S has decided to suspend further payments toward its Term Loan B, including the interest amount. The company asserts that the lenders' actions have necessitated this course of action.
