Navient Solutions, the student loan servicing arm of Navient Corp, is asking a New York bankruptcy judge to throw out an involuntary chapter 11 petition brought by three student loan borrowers, saying the case is frivolous, Reuters reported. Navient, represented by Kirkland & Ellis, filed its motion to dismiss the case on Wednesday, a week after the three borrowers filed their petition in the U.S. Bankruptcy Court for the Southern District of New York. The borrowers, represented by Smith Law Group, say they are owed a combined $45,683.64 in "overpayments" they say Navient illegally collected. "Nothing about the filing is based on reality, facts, or evidence," Navient said in the filing. Austin Smith, representing the borrowers, rejected Navient's characterization of the petition. A hearing on the motion to dismiss is set for Feb. 25 before U.S. Bankruptcy Judge Martin Glenn. Navient said in Wednesday's filing that the borrowers are would-be class members in pending litigation surrounding student loan debts in other courts and that their lawyer, Smith, is using the involuntary petition as an attempt to gain leverage. The company called the involuntary filing "the latest salvo in Counsel's long-running, highly public crusade against Navient and the broader student loan servicing industry." The borrowers say Navient is insolvent, citing $87.4 billion in assets and $85 billion in liabilities, plus $4 billion the Consumer Financial Protection Bureau is seeking in damages in a 2017 lawsuit accusing the company of interest rate manipulations. They also note in the petition that the federal government says Navient owes it $22 million in overcharges over the course of a decade. But Navient says that the debts the petition references are contingent and disputed. In its motion to dismiss, the company touted its financials, saying that by the end of 2020 it had a cash balance of $1.2 billion and had eliminated $1.1 billion in senior unsecured debt.
