On Tuesday, Byju’s initiated legal action against the investment management business Redwood with the purpose of challenging the acceleration of a $1.2 billion term loan B facility and disqualifying the lender for its “predatory tactics.”
Byju’s, the plaintiff in the case, took Redwood to court, alleging that the latter breached the conditions of the term loan facility by acquiring a major amount of the loan while primarily trading in distressed debt. The case was brought before the Supreme Court of New York.
According to a statement released by the business, Byju’s has informed Redwood entities through a notification that the investment firm has been disqualified as a lender with important rights under the regulations for term loans.
Byju’s launches a lawsuit in New York against the lender.
These actions were required of the start-up business because the lenders, lead by Redwood, had engaged in a series of exploitative activities that forced them into this position.
According to the firm, the lenders unjustly accelerated term loan B in March owing to alleged non-monetary and technical defaults. Additionally, the company claimed that the lenders adopted unjustified enforcement steps, such as acquiring control of the company’s U.S. subsidiary BYJU’S Alpha and choosing its management.
The business has announced that it would refrain from making any additional payments to the term B loan providers, including any interest payments, until the matter has been resolved by the court.