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Indian edtech giant Byju\u2019s has filed a complaint in the New York Supreme Court to challenge the acceleration of the $1.2 billion term loan B, calling their demands for prepayment of the entire amount \u201chigh-handed,\u201d and sought to\u00a0disqualify Redwood, who it alleges has conducted a series of predatory tactics.<\/p>\n
The Bengaluru-headquartered startup said Redwood purchased a significant portfolio of the loan while primarily trading in distressed debt \u201cwith the intent of making windfall gains.\u201d<\/p>\n
India\u2019s most valuable startup said it will not make any payments to the term loan B lenders until the dispute is resolved.<\/p>\n
The move from the Indian giant follows lenders \u201cunlawfully\u201d accelerating the term of the loans on the account of \u201ccertain alleged non-monetary and technical defaults,\u201d the company said.<\/p>\n
\u201cOn the back of this unconscionable acceleration of the TLB, the TLB lenders undertook unwarranted enforcement measures including seizing control of Byju\u2019s 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,\u201d Byju\u2019s said Tuesday.<\/p>\n
\u201cIn the Delaware proceedings, the TLB lenders (unsuccessfully) attempted to deprive Byju\u2019s of its contractual right to \u2018disqualify\u2019 lenders engaged primarily in opportunistic trades. The Delaware court rejected this attempt, ruling that the TLB lenders \u201chave not demonstrated either irreparable harm or the balance of the harms as required to support a provision restraining\u201d this contractual right of Byju\u2019s.\u201d<\/p>\n
Byju\u2019s said it had no choice but to take the legal action.<\/p>\n
The company has also issued a notice to the Redwood entities, seeking their disqualification.<\/p>\n
\u201cOnce such disqualification takes effect, Redwood would be restrained from exercising critical rights under the TLB. It is important to note that Byju\u2019s had so far demonstrated remarkable restraint by refraining from utilising the disqualification clause, instead striving for months to achieve an amicable resolution with the hawkish trader-lender,\u201d Byju\u2019s said in a statement.\u00a0<\/span><\/p>\n<\/p><\/div>\n