A US judge ruled on Thursday that the $533 million that the Indian IT company Think & Learn Pvt must freeze in order to safeguard the funds for unhappy lenders who argue the money should only be used to pay them.
Lenders saw varied results from US Bankruptcy Judge John Dorsey's ruling. In order to stop the Indian education technology company, which goes by the name Byju's, from spending the money, they had previously sought that the federal court take custody of it.
One of the company's directors and Byju Raveendran's brother, Riju Ravindran, was the target of Dorsey's directive.
In addition, Ravindran was mandated to assist in resolving one of the main unanswered questions regarding the legal dispute: where the money is. Dorsey remarked, "I do not believe him when he says he cannot" figure out the location from Think & Learn.
An attempt to reach a Think & Learn official for comment was denied.
Sheron Korpus, Ravindran's lawyer, contended that Think & Learn's financial problems are the lenders' fault. Korpus informed Dorsey that the company's decision to withhold the funds from the lenders was warranted due to their excessively assertive claims that the amount was past due. In Delaware and New York state courts, Think & Learn is battling the lenders.
Think & Learn had previously established a holding company to issue $1.2 billion in debt, but the lenders had taken control of the company. Dorsey oversaw Byju's Alpha, the unit that is currently bankrupt. A ruling by Delaware's Chancery Court authorizing that seizure is being appealed by Ravindran.
Beginning Thursday's bankruptcy court in Wilmington, Delaware, Dorsey issued an order for the founder of a small Florida hedge firm to be arrested for failing to disclose the location of Think &
Learn's purported cash hiding place. William C. Morton will be imprisoned for contempt of court per Dorsey's ruling, if he can be found by US Marshals. Morton also has to pay $10,000 per day until he furnishes information regarding the funds, which were temporarily deposited with the hedge fund Camshaft Capital Fund.
The dispute between Think & Learn and lenders owing over $1.2 billion centers on the missing money. Benjamin Finestone, the attorney for Byju's Alpha, stated last week that the $533 million was shifted to Morton's hedge fund and then to an unidentified offshore trust.
During the hearing, Finestone stated that Byju's is facing severe financial difficulties, disagreements with its stockholders, and legal battles with its lenders. Additionally, Ravindran stated in his testimony on Thursday that three of Think & Learn's six directors had left, leaving his brother, himself, and his sister-in-law as the company's only managers.
Finestone said Dorsey during the hearing, "It is substantively important that we get these funds, because the walls are crumbling." BYJU's Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington) is the case number for the US bankruptcy.
