Indian education technology startup Byju's filed a suit against investment management firm Redwood to challenge the acceleration of a $1.2 billion term loan B facility and disqualify the lender for its "predatory tactics," the company said on Tuesday.
Byju's, which filed the suit in the New York Supreme Court, said Redwood purchased a significant portion of the loan while primarily trading in distressed debt, which was contrary to the conditions of the term loan facility.
Byju's also issued a notice to Redwood entities disqualifying the investment firm as a lender with critical rights under the term loan norms once it takes effect, the company said in a statement.
"We had to take these measures following a series of predatory tactics by the lenders, led by Redwood," the startup said.
In March, the lenders unlawfully accelerated the term loan B due to certain alleged non-monetary and technical defaults, the company said, adding that the lenders undertook unwarranted enforcement measures, including seizing control of its U.S. unit BYJU'S Alpha and appointing its management.
The company said it has chosen not to make further payment to the term B loan providers, including any interest, until the dispute is decided by the court.
(Reporting by Baranjot Kaur in Bengaluru; Editing by Janane Venkatraman and Dhanya Ann Thoppil)