Byju's sues term loan lender; won't make further payments

In a fresh turn of events, Byju’s on Tuesday said that it has filed a suit in the New Yo rk S up r e m e Court to challenge acceleration of the $1.2 billion term loan B (TLB) and to disqualify lender Redwood who the firm alleged, purchased a significant portion of the loan while primarily trading in distressed debt with the intent of making windfall gains.

Byju’s said that “a series of predatory tactics” undertaken by the lenders, led by Redwood pushed it to make such a move. Once the disqualification of the Redwood entities takes effect, Redwood would be restrained from exercising critical rights under the TLB.

The development comes a day after reportedly a deadline for Byju’s to make a $40 million quarterly interest payment on its $1.2 billion loan lapsed. However, given that legal proceedings are now on foot both in Delaware and New York, the entire TLB is disputed. The edtech major asserted that it “cannot be expected to” and has “elected not to” make any further payment to the TLB lenders, including any interest until the dispute is decided by the court.