Byju’s lenders win fight over loan default, control of unit

economictimes.indiatimes.com:

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.

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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.
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. Byju’s had been working to sell assets and deal with the loan issue when government investigators searched company offices this year. The lender fight also has prompted some investors to write down their stakes in one of the world’s largest ed-tech companies.
A lawyer for the lenders said earlier this year that Byju’s Alpha was intended to serve as a holding company to protect their rights in the case. The lenders weren’t seeking to take over the entire