The case in the Delaware court centred around a $1.5 billion Term Loan B guaranteed by Think - Learn, the parent company of Byjus | Photo: Bloomberg2 min read Last Updated : Sep 24 2024 | 11:08 AM ISTThe Supreme Court of the US state of Delaware has ruled that Indian edtech company Byjus defaulted on a $1.5 billion loan, entitling lenders to "exercise remedies".The ruling on September 23 allows lenders to take control of Byjus assets in the United States, primarily Byju Alpha Inc., and demand full repayment.
Lenders have appointed Timothy Pohl as the sole director of Byju Alpha Inc for the purpose.We are gratified that the Delaware Supreme Court decisively affirmed what we have known all along: Byjus breached and defaulted on the credit agreement it knowingly and willingly entered into," they said in a statement."Most notably, this ruling confirms that Byjus was in default, which both Byju (Raveendran) and Riju personally acknowledged when they signed multiple amendments to the credit agreement on Byjus behalf between October 2022 and January 2023, the statement said, referring to the edtech company's founder and his younger brother.As such, and as validated by the Delaware Supreme Court, the lenders were well within their contractual rights to accelerate the term loan and take control of Byju Alpha Inc.The case in the Delaware court centred around a $1.5 billion Term Loan B guaranteed by Think - Learn, the parent company of Byjus.In a separate statement, the lenders said: Byju has attempted to concoct an alternate narrative that Byjus did not default and to place the blame for the companys failure on others, rather than repaying the lenders the money that is rightfully owed to us, including disclosing what happened to the $533 million of missing loan proceeds.The Delaware Supreme Court ruled that the series of amendments to the credit agreement, entered into between October 2022 and January 2023, make it clear that Byjus voluntarily conceded both that events of default occurred and the consequences thereof, namely GLASs legal entitlement to exercise remedies.
(GLAST is the trustee for lenders to which Byju's owes $1.2 billion)The ruling added: Nor is this a situation where a sophisticated party tricked an unsophisticated party with fine print and legal jargon.
The amendments were contracts extensively negotiated by sophisticated, well-counselled parties, and the several rounds of amendments demonstrate an obvious, deliberate effort by the parties to address this specific issue.
Accordingly, the parties are bound by the terms of the credit agreement.First Published: Sep 24 2024 | 11:08 AMIST