Byju's Files Lawsuit Against Redwood, Alleging Predatory Tactics In $1.2 Billion Term Loan Acceleration

Byju's, an Indian education technology startup, has launched a lawsuit against investment management firm Redwood to contest the acceleration of a $1.2 billion term loan B facility and disqualify the lender for its "predatory tactics," according to the company's announcement on Tuesday.

According to Byju's, which filed the lawsuit in New York Supreme Court, Redwood purchased a major chunk of the loan while predominantly trading in distressed debt, which violated the terms of the term loan facility.

Byju's, in a statement, revealed that it served a notification to Redwood companies, effectively rendering the investment firm ineligible as a lender with essential rights as per the term loan regulations once they were enacted.

"We had to take these measures following a series of predatory tactics by the lenders, led by Redwood," the startup said.

Byju's asserts that the term loan B was unjustly accelerated by the lenders in March, citing alleged non-monetary and technical defaults. The company further claims that the lenders resorted to unwarranted enforcement measures, such as seizing control of its U.S. unit, BYJU'S Alpha, and imposing their own management team.

The company stated that it has opted not to make any future payments to the term B loan providers, including any interest, until the disagreement is resolved in court.