Byju Raveendran Photographer: Paul Yeung/Bloomberg
By Steven Church
In an attempt to simplify the convoluted bankruptcy case of Byju’s unit, a federal judge offered to spare the detention of a Florida hedge fund manager in exchange for his assistance in locating $533 million that the Indian IT business was purportedly trying to conceal.
During a Tuesday court session in Wilmington, Delaware, US Bankruptcy Judge John Dorsey decided to revoke William C. Morton’s arrest warrant. Morton is the founder of Camshaft Fund. According to court documents, Byju’s put $533 million of the loan proceeds with the fund last year.
Later, the funds were transferred to a lender in the UK and subsequently to an unidentified non-US company connected to Byju’s. The US-based Byju’s unit’s bankruptcy case is being used by lenders as leverage to get the money back.
Morton did not speak during the video appearance in court from Dubai, but the judge did order him to return to the US and meet with Byju’s lenders’ attorneys within ten days. Dorsey threatened to reimpose the arrest warrant if the fund manager—who the court claimed was leaving the country to avoid answering questions—fails to appear.
“We need to move this case forward somehow,” Dorsey said.
A disagreement between lenders owing $1.2 billion and the company established by businessman Byju Raveendran is centered on the missing funds. The actual name of the education technology company is Think & Learn Pvt.
The money is owned by Think & Learn-affiliated Byju’s Alpha Inc., a bankrupt sham business that the lenders seized control of after their loan fell behind.
The money manager, who is in his 20s, is eager to assist with lenders and answer questions under oath, according to what Morton’s lawyer, Pieter Van Tol, told Dorsey on Tuesday.
Because of his fear of being arrested, Morton had previously declined to contact with lenders in Miami, the location of his hedge fund, Van Tol stated in court.
Van Tol declined to comment further after the hearing.
The US bankruptcy case is BYJU’s Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).