Byju’s filed a lawsuit against investment management firm Redwood on Tuesday to contest the acceleration of a $1.2 billion term loan B facility and disqualify the lender for its “predatory tactics.”
Byju’s, who filed the lawsuit in the New York Supreme Court, claimed that Redwood violated the terms of the term loan facility by purchasing a significant portion of the loan while predominantly trading in distressed debt.
Byju’s issued a notice to Redwood entities disqualifying the investment firm as a lender with critical rights under the term loan norms, the company stated in a statement.
Following a succession of exploitative practices by the lenders, led by Redwood, the startup was compelled to take these steps.
In March, the lenders unlawfully accelerated term loan B due to alleged non-monetary and technical defaults, the company said, adding that the lenders took unwarranted enforcement measures, such as assuming control of its U.S. subsidiary BYJU’S Alpha and appointing its management.
The company stated that it will not make any further payments to the term B loan providers, including any interest, until the court decides the dispute.