The Melorra Recovery - A Testament to Tap Invest’s (now ultra) Grit, Process, and Investor-First Ethos

Introduction

In the investment world, not all deals go as planned. But what defines a platform is how it responds when things don’t go as planned.

March 2024 marked Tap Invest's (now ultra) first brush with a default scenario - an asset leasing deal with Melorra (August Jewellery Pvt Ltd). What followed was a 14-month marathon involving legal filings, court proceedings, investor negotiations, and, most importantly, unrelenting dedication across our Legal, Compliance, and Investor Success teams.

This case stands as a testament to Tap Invest’s (now ultra) legal agility, transparent communication, and structured approach to resolution, setting a benchmark for how defaults or early exits are managed on our platform.

This is not just a case study - it’s a chronicle of countless sleepless nights, meticulous action, and our refusal to compromise on investor trust.

Background

In early 2024, Tap Invest (now ultra) facilitated an asset leasing investment in Melorra, a direct-to-consumer jewellery brand known for its lightweight, everyday-wear gold jewellery and its fast-growing online-to-offline presence.

At the time of listing, Melorra’s financials were robust. Backed by marquee investors, the company had raised over $78-95 million in funding, including a Series D round in mid-2022. They reported strong revenue growth (₹360 Cr+ in FY22) and showed potential for stable, recurring sales, fitting well within Tap Invest’s (now ultra) leasing criteria.

However, after this growth phase, Melorra began facing internal financial challenges. Their rapid scaling, expanding inventory, increasing headcount, and physical footprint, led to higher cash burn and shrinking contribution margins.

By late 2023, signs of stress emerged: delays in vendor and employee payments, elevated operational costs, and thinning working capital. These pressures culminated in a liquidity crunch.

In March 2024, Melorra requested an early exit from the leasing agreement due to internal restructuring and cash flow issues. This request could have jeopardized investor capital. Tap Invest (now ultra) took this challenge head-on with courtroom strategy, compliance execution, and an investor-first recovery plan that combined legal intervention with structured communication and persistence.

Collection & Ground Action Framework

Before legal escalation, Tap Invest's collection team led a rigorous follow-ups. Multiple reminders were issued via emails and calls, directly involving Melorra’s finance team and founders. The team made physical visits to Melorra's Bangalore office in Mahadevpura, observing shrinking staff strength and office downsizing, early signs of operational distress. During these visits, Melorra continued to offer vague verbal assurances without any concrete repayment plan.

Despite repeated attempts, Melorra failed to present a viable resolution. In situations where we see intent to resolve, our preference is to settle amicably. However, with Melorra, all recovery dialogue ceased from their end, pushing Tap Invest (now ultra) to initiate legal action.

Even post-litigation, our collection team persisted. Meetings continued in parallel with court proceedings to avoid a prolonged legal battle.

Tap Invest (now ultra) remained open to an out-of-court settlement, but Melorra’s lack of responsiveness continued through the initial hearings. Meanwhile, rumours of a potential acquisition made the ongoing legal case a reputational risk for them.

One key achievement of our collection effort was the recovery of multiple high-end tech assets. In certain cases, investors were directly compensated with assets. In others, recovered equipment was sold and the proceeds distributed to users, a proactive measure to protect capital even before full legal closure.

This milestone effort, recovering high-end tech assets through persistent ground action, became a defining moment in Tap Invest’s (now ultra) pre-legal recovery strategy and demonstrated our commitment to going the extra mile for investor protection.

Legal and Strategic Framework

1. Early Legal Action

• Cheque bounce proceedings filed instantly post-default.

• ₹6.4L recovered in March–April, aiding immediate partial payouts.

2. Injunction Order Filing

• An aggressive legal step - court officer empowered to seize and resell Melorra’s leased assets.

• Sent a strong signal, triggering formal court cases and mediation.

3. Mediation Phase

• Ran over 6 months, through extensions and in-court hearings.

• Tap Invest remained firm - rejecting depreciated asset swaps, pushing for monetary repayment.

4. Court-backed Repayment Terms

• Tap Invest secured a legally binding settlement.

• Melorra agreed to repay over 3 tranches, starting April 2025.

The Human Effort Behind the Scenes

This wasn’t just a legal case. It was a cross-functional war room involving:

• Legal: Court visits, filings, injunction orders, mediation follow-ups.

• Compliance: Documentation, asset handling protocols, legal disclosures.

• Investor Success: Proactive communication, status updates, payout processing.

Every week brought new twists, adjournments, negotiations—and Tap Invest stood ground.

Challenges Faced

• Delayed Fundraising: Melorra’s inability to raise funds in time delayed buyback.

• Legal System Delays: Multiple court adjournments slowed resolution.

• Depreciated Asset Offers: Melorra attempted to offer used assets instead of monetary repayment.

• Mediation Cycles: Settlement discussions extended over several months with multiple extensions.

Tap Invest’s (now ultra) Response Strategy

1. Legal Enforcement

• Injunction Order: Secured to prevent Melorra from liquidating or transferring leased assets.

• Bank Account Freezing: Legal applications filed to block financial maneuvering and escalate pressure.

2. Investor Communication

• Transparent email and in-app updates at every legal or settlement milestone.

• Dedicated support desk for impacted investors throughout the process.

3. Negotiation with Oversight

• Maintained open channels with Melorra’s leadership and equity backers.

• Rejected unfavourable proposals that compromised investor returns.

• Finalized a court-backed repayment plan, enforceable and time-bound.

Payout Structure & Returns

Returns Were Asset-Level Based:

• Some investors received modest returns (~3–4%), especially those involved in initial buybacks.

• Others received full IRRs of 18 to 22% depending on the deals invested, reflecting the full term and risk premium.

This variance was transparently communicated, with clear breakdowns and support during every payout phase.

Outcome:

• 100% Recovery of capital invested.

• Timely Repayment Tranches executed as per legal agreement.

• Investor Payouts Processed in Full by June 2025.

• Investors protected from losses despite early deal default.

Key Takeaways

• Proactive Legal Strategy

Early enforcement of injunctions and account freezes ensured asset protection

• Transparency with Investors

Regular communication helped maintain confidence even through long delays

• Persistence Pays

Recovery took over a year, but patience ensured the outcome was investor-first, not compromise-driven

Key Learnings

• Be Early, Be Legal: Quick cheque bounce filings ensured immediate accountability.

• Go All In: Injunction orders, account freezes, and court presence show we don’t settle halfway.

• Communicate Relentlessly: Investors stayed with us because we never stopped talking to them.

• Celebrate the Wins: This case has set an internal and external precedent - and will be remembered.

Conclusion

The Melorra recovery isn’t just a closed loop - it’s a badge of honour. For our investors, it’s reassurance that Tap Invest is unshakable in adversity.

For us, it’s a lived experience in fighting for what's right.

We didn't just win back the money.

We earned back more - trust, loyalty, and proof of purpose.