A hedge fund founder at the center of a $1.2 billion legal battle between Indian education-technology company Byju’s and its lenders is staying outside the U.S. despite a court order to return, saying he fears for his safety, WSJ Pro Bankruptcy reported. William Cameron Morton said in an interview that he left the U.S. rather than comply with a court order to divulge the whereabouts of nearly $540 million that Byju’s invested in his Florida-based hedge fund firm, Camshaft Capital. Morton faces the threat of jail time because he hasn’t turned over that information to investors that lent $1.2 billion to Byju’s, once India’s most valuable startup before its financial problems clouded the country’s venture-capital scene. Judge John Dorsey of the U.S. Bankruptcy Court in Wilmington, Del., recently threatened Morton with “all possible sanctions,” including confinement, if he continued ignoring orders. Credit funds including Ares Management and Redwood Capital allege that Morton helped Byju’s move more than a half-billion dollars out of their reach through his hedge fund, which they have called a sham operation. Last month, an agent acting on the lenders’ behalf filed a chapter 11 petition for Byju’s Alpha, a shell entity named as the loan borrower, as part of their efforts to track down the money it invested in Camshaft. Byju’s has said it wasn’t required under its loan agreement to keep its assets in cash and did nothing wrong by investing $540 million with Camshaft.
