Lenders to Byju’s, once one of India’s hottest tech startups, properly cited a default on a $1.2 billion loan when taking over control of a unit of the education-technology provider, a Delaware judge concluded.

The lenders – which include Redwood Investments LLC and Silver Point Capital LP – were within their contractual rights to replace a relative of company founder Byju Raveendran on the board of Byju’s Alpha, a special-purpose company formed for financing purposes, with their nominee, Delaware Chancery Court Judge Morgan Zurn ruled. 

Zurn rejected a complaint by Byju’s that Timothy Pohl, tapped by lenders to oversee the special-purpose entity, was improperly authorized to take the reins. Pohl was “effectively seated” as the sole director of Byju’s Alpha because of the defaults, the judge said in a 41-page ruling. 

Lenders have been pushing hard for the repayment of the $1.2 billion loan amid the company’s mounting distress after a pandemic-era boom in online learning fizzled out. Byju’s had been working to sell assets and deal with the loan issue when government investigators searched company offices this year. The lender fight also has prompted some investors to write down their stakes in one of the world’s largest ed-tech companies. 

A lawyer for the lenders said earlier this year that Byju’s Alpha was intended to serve as a holding company to protect their rights in the case. The lenders weren’t seeking to take over the entire ed-tech company, Brock Czeschin, a lawyer for Red Tree and Silver Lake, said in a May court hearing.  

Bengaluru, India-based Byju’s didn’t immediately respond to a request for comment. The closely held company had said the lenders’ default arguments are bogus. 

“We are pleased the Delaware Chancery Court agrees that Byju’s has repeatedly defaulted on its loan obligations,” a spokesperson for the lender group said in a statement. “The lenders reserve all rights available to them.”

The loan terms allowed lenders to take control of pledged Bjyu’s Alpha shares if a default triggered that right, Zurn said in her Nov. 2 ruling. When a company unit failed to get the Indian government’s backing as a loan guarantor, the lenders filed a notice of default in March, according to a transcript of the judge’s announcement of her decision. 

Pohl removed all of the company’s officers and took over as CEO after he was was appointed as sole director of Byju’s Alpha, according to the transcript. The suit over the loan was filed by Glas Trust Co., which serves as trustee for the lenders. The trust turned to Pohl to oversee Byju’s Alpha on behalf of the creditors. 

Byju’s complained that the ex-lawyer, whose received at least $375,000 for his role as the firm’s supreme leader, was reaping excessive fees. Zurn rejected that argument, saying Pohl’s $75,000-per-month pay was authorized by a “status-quo” order she entered in the case to protect Byju’s Alpha. 

The case is Glas Trust Company v. Ravindran, 2023-0488, Delaware Chancery Court (Wilmington).

Tesla CEO Elon Musk’s fortunes have faced a substantial blow as the company’s shares stumbled following an analyst downgrade and disappointing quarterly reports from smaller electric vehicle rivals.

Tesla’s stock price took a nosedive on Thursday, falling 5.5% to $210, after HSBC analyst Michael Tyndall initiated coverage of the stock with a sell rating and a target price of $133. Tyndall’s downgrade is the latest sign that investors are becoming more cautious about Tesla’s stock, which has been volatile in recent months.

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The sell rating comes at a time when Tesla is facing a number of challenges, including increasing competition from rivals, rising costs, and supply chain disruptions. The company is also facing scrutiny from regulators around the world over its self-driving technology and safety concerns.

According to Forbes Magazine, some other electric vehicle stocks are sliding, like American electric car maker stocks Rivian (shares down 10% on Thursday) and Lucid (down 5%) after the pair each reported earnings, which disappointed investors Tuesday, with each company on track to burn through billions of dollars in cash this year.

As per the Forbes valuation, Mr Musk, who owns about 13% of Tesla shares, lost $8.7 billion Thursday, a more than $7 billion larger decline than that of any other billionaire, according to Forbes’ calculations. Musk remains the wealthiest person on earth with an estimated net worth of $223.7 billion, though that remains about $100 billion below his peak fortune of $320 billion achieved in November 2021, when Tesla was valued at over $1.2 trillion.

YouTuber Elvish Yadav, accused of using smuggled snakes in a music video, told police that the snakes had been arranged by Bollywood singer Fazilpuria, sources said.

During Mr Yadav’s questioning, Noida Police asked him about a video where he is seen with two snakes. The YouTuber told cops that the snakes had been arranged by Fazilpuria.

Cops have reached out to the singer and called him in for questioning.

Police made a major breakthrough in a racket of snake smuggling, when they arrested five people with snakes based on a sting operation. The operation was carried out by the NGO – People For Animals (PFA).

One of the arrested told police that they had arranged the snakes for a party being hosted by Elvish Yadav. Police rescued nine snakes, five of them cobras, from the banquet hall where the party was being held. About 20 ml of suspected snake venom was also recovered.

Mr Yadav, who shot to fame after winning the reality show Bigg Boss OTT 2, has denied all allegations.

Police have questioned the 26-year-old twice and asked him several questions about his involvement in the sale of snake venom based on the statements of Rahul Yadav, who was arrested for allegedly supplying the venom at rave parties.

Cops have also sought data from Mr Yadav’s mobile phone to obtain information about his call logs and past locations.