Byju’s Ordered to Freeze $533 Million by US Bankruptcy Judge
In a recent ruling, US Bankruptcy Judge John Dorsey has mandated that tech firm Think & Learn Pvt freeze $533 million. This decision comes as a win for lenders who have been embroiled in a legal battle with the education-tech firm, commonly known as Byju’s.
In a recent ruling, US Bankruptcy Judge John Dorsey has mandated that tech firm Think & Learn Pvt freeze $533 million. This decision comes as a win for lenders who have been embroiled in a legal battle with the education-tech firm, commonly known as Byju’s.
The dispute revolves around the allocation of funds, with disgruntled lenders asserting that the money should be exclusively reserved for repaying debts. Judge Dorsey’s order targets Riju Ravindran, a director at Byju’s and the brother of founder Byju Raveendran.
One of the key aspects of the court’s decision is the demand for transparency regarding the whereabouts of the frozen funds. Judge Dorsey expressed skepticism regarding Ravindran’s claim of ignorance about the money’s location, stating, “I do not believe him when he says he cannot” learn the location from Think & Learn.
Representatives for Think & Learn declined to comment on the ruling, while Ravindran’s attorney, Sheron Korpus, argued that the lenders themselves bear responsibility for the financial challenges faced by the company. Korpus contended that Think & Learn was justified in withholding the funds due to aggressive actions by the lenders, who claimed the debt was in default.
The legal battle extends beyond the bankruptcy court, with ongoing disputes in state courts in Delaware and New York. Lenders had previously taken control of a holding company within Think & Learn to address debts totaling $1.2 billion. This unit, Byju’s Alpha, is now undergoing bankruptcy proceedings overseen by Judge Dorsey.
The complexity of the case is further highlighted by the involvement of a Florida hedge fund and its founder, William C Morton. Judge Dorsey ordered Morton’s arrest for refusing to disclose the location where Think & Learn allegedly stashed the $533 million. Morton faces contempt of court charges and a daily fine until he reveals the details about the money, which was temporarily held by the hedge fund Camshaft Capital Fund before being transferred to an offshore trust.
Byju’s Alpha lawyer Benjamin Finestone emphasized the urgency of resolving the fund’s whereabouts, citing the company’s precarious financial situation and ongoing disputes with shareholders and lenders. Ravindran also testified that Think & Learn’s board has shrunk to only three members, indicating internal challenges within the company.
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