Lenders are trying to track down $533 million that Morton received from Byjus in 2022, court papers show | Photo: Bloomberg3 min read Last Updated Aug 21 2024 | 7:55 AM ISTBy Steven ChurchA 27-year-old hedge fund manager accused of helping Byjus hide $533 million from lenders has only $3,000 in cash left to defend himself from a lawsuit against himself and the troubled Indian tech firm.William Morton pleaded with a federal judge on Tuesday to not let his lawyers quit, arguing he hasnt been able to find a new law firm to represent him in the bankruptcy case of a Byjus unit now controlled by lenders that are owed $1.2 billion.This is a very awkward position for me to be in, Morton told US Bankruptcy Judge John Dorsey in Wilmington, Del.
Morton said he has less than $3,000 left in his personal and business accounts.
He added that Byjus had pledged to pay his legal bills but quit funding his lawyers.
A Byjus representative could not be reached for comment.Dorsey delayed ruling on requests by Mortons lawyers and the law firms representing Byjus to quit the case.
After all sides have presented their final arguments in the case, possibly next month, the judge said he will decide whether to release the attorneys.Both teams of lawyers blame their clients for the breakdown.
Mortons main lawyer, Pieter Van Tol, said his firm is owed several million dollars.
In federal court, even when a client refuses to pay a lawyer, a judge must decide whether the attorney can quit.After the hearing, Morton said his Miami-based Camshaft Fund has run out of cash and owes money to creditors.
Im doing everything possible to piece the business back together, he said, noting that Byjus is no longer a client.
Camshaft Fund has some hard-to-sell assets that Morton said he is trying to avoid liquidating at fire-sale prices.Lenders are trying to track down $533 million that Morton received from Byjus in 2022, court papers show.
The money was later transferred beyond the lenders reach to a non-US entity on orders from Byjus managers, according to court records.Morton and Byjus face a fraudulent-transfer lawsuit in the bankruptcy case of Byjus Alpha, a shell company created by Byjus in order to tap US capital markets.
After Byjus defaulted, lenders seized control of the the shell company, put it under court protection and sued to get $533 million they claim should go to them.Dorsey had previously held both Morton and a Byjus manager in contempt of court for refusing to help find the cash, which is at the heart of a dispute between US lenders and the startup founded in India by entrepreneur Byju Raveendran.
The education-tech companys official name is Think - Learn Pvt.The US bankruptcy case is BYJUs Alpha Inc., 24-10140, US Bankruptcy Court District of Delaware (Wilmington).First Published: Aug 21 2024 | 7:55 AMIST