On Friday, investors breathed a sigh of relief when the Bombay High Court quashed the Yes Bank administrator’s order to write down AT-1 bonds worth more than Rs 8,400 crore. The order came amid a wave of petitions from bondholders, including financial institutions and individual retail investors.

The High Court decision comes a day before Yes Bank reports its quarterly results on Saturday.

“In a big relief to 63 Chand and others, the Bombay High Court today set aside the administrator’s order of Yes Bank, which wrote over Rs 8,300 crore worth of AT1 bonds overnight, leaving investors high and dry. This will benefit all bondholders, including 63 Moon Technology, which holds bonds worth Rs 300 crore,” 63 Moon said in a press release. It added that the firm was represented by advocates Vikram Nankani, Rahul Sarda and Crawford Bayley.

In addition to 63 moons, many investors and fund companies have invested in these AT-1 bonds. On Thursday, Sebi reportedly investigated the Japanese-India mutual fund’s bond investment. The fund was the largest holder of those bonds from 2016 to 2019.

Nearly Rs 3,000 crore of Yes Bank debt is held by more than 10 fund houses. These fund houses pocket the exposure after administrators make their decisions.

Fund houses act when certain companies’ debt exposures turn sour. That separates that portion of the portfolio from the overall plan. Investors can exit the remaining portfolio without forgoing the opportunity to recover debt, which goes into side pocket units. Retail investors also mis-sold these bonds in large numbers. Previously, the fund held debts of Essel Group companies.

It is still being determined whether the ruling will be challenged by the banking regulator, RBI or Yes Bank. Earlier, 63 moons had filed lawsuits against private sector lenders and the Reserve Bank of India (RBI).

It has lodged an objection in the Madras High Court against the lenders’ decision to cancel the AT-1 bond. The firm has invested in 3,000 Yes Bank write-down AT-1 bonds and has held the notes since March 2018.

A petition filed by 63 moons against lenders, RBI and RBI-appointed administrators claimed that the promise of good returns was a complete misuse of its Rs 300 crore investment in AT-1 bonds.

The 63 moons petition argues that under Basel III norms and international best practices, bondholders’ claims can only be cancelled when the equity capital has lost nearly all of its value and must be written off.