The founder of Byju’s plans to challenge a US court ruling requiring him to pay over $1B in a bankruptcy case.

A Delaware bankruptcy court issued a default judgment on November 20, 2024, ordering Byju Raveendran to pay over $1.07 billion after finding that he repeatedly ignored court orders and provided evasive, incomplete responses regarding approximately $533 million that Byju’s US unit allegedly transferred in 2022. The ruling stems from legal action by lenders seeking to recover funds connected to a $1.2 billion term loan extended to the edtech startup in 2021 through its Delaware-based special-purpose vehicle, Byju’s Alpha Inc. The default judgment comprises two components: approximately $533 million linked to the transfer of Alpha Funds in 2022, and about $540.6 million relating to the transfer of the Alpha Funds’ interest in Camshaft Capital Fund, a US hedge fund. The court described the judgment as an extraordinary remedy warranted by Raveendran’s months-long pattern of noncompliance, including skipping hearings, missing extended deadlines, and ignoring a prior contempt order imposing $10,000 in daily sanctions that remain unpaid.

Raveendran’s Defense and Counter-Claims

Byju Raveendran has vigorously denied all wrongdoing and announced his intention to appeal the ruling, arguing that he was deprived of a fair opportunity to defend himself. His legal representatives stated that GLAS Trust was aware that the Alpha loan funds were not used for personal benefit but were instead deployed for Think & Learn, the parent company. Raveendran’s counsel said Byju’s founders are preparing claims against GLAS Trust and others in multiple jurisdictions, expected to seek at least $2.5 billion in damages and, absent a settlement, to be filed before the end of 2025. The couple previously accused lenders of attempting a hostile takeover of the company when they were sued in April 2024. Raveendran’s attorney emphasized that they believe the court erred in its judgment and that relevant facts were ignored during the expedited process that led to the default ruling.

The Fall of India’s Edtech Giant

The default judgment marks a stunning fall for Raveendran and his eponymous company, once India’s most valuable startup with a $22 billion valuation and backed by global investors including Tiger Global, the Chan Zuckerberg Initiative, and Prosus. The company is now entangled in multiple legal battles across jurisdictions, facing funding droughts, mass layoffs, and insolvency proceedings. In India, Byju’s is undergoing a court-supervised sale process after insolvency proceedings began last year, with early bidders including Manipal Education and Medical Group and UpGrad. Massive layoffs shrank its workforce from about 60,000 employees to roughly 14,000 by early 2024, representing one of the steepest downsizings in India’s startup history.