BYJU'S on Friday (March 15) responded to a US bankruptcy judge ordering Think & Learn to freeze $533 million to protect the money for disgruntled lenders who claim the cash should only be used to pay them. The order was delivered yesterday, March 14, at a Delaware court.
BYJU’S said: "This order merely maintains the status quo, because we have always maintained that the said funds are safely parked in one of our subsidiaries and, as per the order, it will rightfully remain there."
As per Bloomberg, “Think & Learn Private Limited, doing business as BYJU'S, provides online educational services.”
In its statement, BYJU'S highlighted that the court denied the primary relief sought by the plaintiffs, which was to deposit the funds into court.
Lenders had previously seized control of a holding company called BYJU'S Alpha — now under the US judge’s oversight — set up by Think & Learn to issue $1.2 billion in debt. Ravindran is appealing a decision by Delaware's Chancery Court approving that seizure.
"The court denied the primary relief requested — that a mandatory injunction be granted depositing the monies into court. We had also maintained consistently that the lenders last year were aware of the situation of the $500m in BYJU’S Alpha," the edtech major said.
BYJU'S went on to assert that certain entities, including an alleged ad hoc group, were collaborating with large investors to exploit the situation for their own gain.
Riju Ravindran's attorney, Sheron Korpus argued on March 14 that the lenders are at fault for any financial woes suffered by Think & Learn. Further, Ravindran testified that three of Think & Learn's six directors have resigned, leaving only himself, his brother, and his sister-in-law in charge of the company.
The murky background
At the start of the Thursday bankruptcy hearing in Wilmington, Delaware, Judge John T. Dorsey ordered the arrest of William C. Morton, the founder of a small Florida hedge fund for refusing to reveal where Think & Learn allegedly hid the cash. Morton must also pay $10,000 a day until he provides details about the money, which was briefly placed with the hedge fund Camshaft Capital Fund, the judge has said.
The missing money is at the heart of a fight between lenders owed more than $1.2 billion and Think & Learn. The $533 million was transferred to Morton's hedge fund and then moved to an unnamed, off-shore trust, BYJU'S Alpha lawyer Benjamin Finestone had said last week.
