Preliminary Injunction Granted Amid Financial Controversy
In a dramatic turn of events in the ongoing BYJU’S saga, a US court has issued a series of orders, including the prohibition of further transfer or use of $533 million in loan proceeds.
Simultaneously, the court has ordered the arrest of William Morton, Founder of Camshaft Capital Fund, LP, adding another layer of complexity to the unfolding legal battle.
Judge’s Decree and Defendants’ Allegations
Judge John T. Dorsey of the US Bankruptcy Court for the District of Delaware has granted a preliminary injunction, asserting BYJU’S Founder Byju Raveendran and Co-founder Divya Gokulnath’s collaboration with defendants Riju Ravindran, Inspilearn LLC,
and Camshaft Capital Fund, LP and its affiliates. This ruling came following allegations of obfuscation regarding the whereabouts of the disputed funds.
Timeline of Transactions and Court Proceedings
The court’s action follows a series of transactions dating back to 2021 when BYJU’s Alpha, Inc., a US subsidiary, received funds from a $1.2 billion term loan B (TLB). Subsequently, in 2022, a significant portion of these funds was transferred to Camshaft Capital Fund, LP, under Ravindran’s control.
Further complications arose in March 2023 when Ravindran transferred BYJU’S Alpha’s LP interest in Camshaft Capital Fund to Inspilearn LLC, culminating in the funds being redeemed by an undisclosed entity in February 2024.
Arrest Order and Continuing Legal Battles
The court’s arrest order for Morton was prompted by his failure to appear in court and provide requested information regarding the fund transfer. Additionally, Morton faces daily fines until compliance is achieved. The court’s actions
have been applauded by the SteerCo, which views the freezing of assets as a vital step towards recovering the missing $533 million.
BYJU’S Response and Ongoing Challenges
Despite repeated attempts, BYJU’S has yet to provide a comment on the matter. The TLB dispute, now embroiled in legal proceedings, represents just one of the many challenges facing the edtech giant.
Internal strife has also manifested in India, where shareholders have moved to dismiss key management figures, including CEO Raveendran, amid accusations of mismanagement and oppression.
Legal battles, including those in the Karnataka High Court and the National Company Law Tribunal, continue to add pressure to the beleaguered company.
Conclusion
As the legal drama unfolds, the future of BYJU’S hangs in the balance. With each new development, the complexity of the situation deepens, leaving stakeholders anxiously awaiting resolution in the courts.
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