US Court directs Byju's to freeze $533 million in relief for lenders
By MYBRANDBOOK
A US judge has ordered Think & Learn, the parent company of Byju’s, to freeze $533 million to protect the money for "disgruntled lenders who claim the cash should only be used to pay them", a US judge has ruled.
The judge’s decision is being seen as a mixed victory for lenders engaged in a bitter battle with the firm over the money. The sum of $533 million was allegedly transferred to Morton’s hedge fund and then moved to an unnamed, off-shore trust.
As per report, earlier the lenders demanded the money to be placed under the control of the federal court so that the company could not spend the cash.
The order was directed at founder Byju Raveendran’s brother and one of the directors of the company Riju Ravindran.
Ravindran was also ordered to help solve one of the central mysteries of the court dispute: where the money is located. “I do not believe him when he says he cannot” learn the location from Think & Learn, the judge said.
Sheron Korpus, the attorney of Ravindran, argued that the lenders are at fault for any financial woes suffered by Think & Learn. Korpus informed Dorsey that the money was kept away from the lenders because they have been overly aggressive in claiming the debt was in default. Think & Learn is fighting the lenders in state courts in Delaware and New York.
The dispute over the money started due to the actions taken by lenders who took control of a holding company established by Think & Learn to issue $1.2 billion in debt. This unit, Byju's Alpha, is presently undergoing bankruptcy proceedings overseen by Judge Dorsey. Meanwhile, Ravindran is appealing a prior decision by Delaware's Chancery Court regarding the seizure of assets.
The judge also directed the arrest of the founder of a Florida hedge fund, William C Morton, for his refusal to disclose the whereabouts of the contested funds.
The judge instructed US Marshals to detain Morton, who faces charges of contempt of court and daily fines until he provides relevant information.
According to Byju's Alpha lawyer Benjamin Finestone, the funds were held by Morton’s hedge fund for a short period of time before being transferred to an undisclosed offshore trust.
Finestone highlighted the urgency of accessing the disputed funds, citing the company's precarious financial situation.
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