Byju Raveendran, the founder of Indian ed-tech firm Byju’s, is preparing to challenge a U.S. bankruptcy court order demanding over $1.07 billion in payments. The ruling follows allegations that Byju’s U.S. unit transferred $533 million in 2022 that was never accounted for, along with a separate $540.6 million stake in a limited partnership. The dispute centers on a $1.2 billion term loan extended in 2021 by a group of U.S. lenders led by GLAS Trust, who now allege the funds were misappropriated.
The Core of the Dispute: The court issued a default judgment after finding Raveendran repeatedly defied orders and provided incomplete answers regarding the missing funds. Lenders claim the money was improperly transferred, while Raveendran’s legal team insists the court acted unfairly, ignoring relevant facts and denying him a full defense. The judge noted a pattern of noncompliance, including missed hearings, ignored deadlines, and unpaid sanctions.
Escalating Legal Battles: This judgment builds on a series of legal clashes that began in April when GLAS Trust sued Raveendran and his wife, Divya Gokulnath, over the missing $533 million. The couple previously accused lenders of a hostile takeover attempt and threatened a $2.5 billion counter-suit, which has yet to materialize. Meanwhile, Byju’s also filed a challenge in New York against the loan acceleration, and Raveendran’s team is now preparing claims in multiple jurisdictions, seeking at least $2.5 billion in damages.
The Fall of a Startup Darling: This situation marks a steep decline for Byju’s, once valued at $22 billion and backed by investors like Tiger Global and the Chan Zuckerberg Initiative. The company now faces lawsuits, funding shortages, layoffs, and a scramble among creditors. The court ruled that Raveendran’s activities within the U.S. – fundraising and serving as a director – establish jurisdiction in the case.
Allegations of Misuse: Recent filings suggest most of the $533 million was “round-tripped” back to Raveendran and associates, a claim he denies. His counsel argues the funds were used for the parent company, Think & Learn, not personal gain. The judge described the case as “extraordinary” and “unique,” justifying the “richly warranted” relief granted.
The ruling is being appealed, with Raveendran’s legal team claiming the court erred and ignored critical facts. The parties have seven days to respond to the judgment.
The outcome will determine whether Byju’s founder must pay over $1 billion, and will likely influence the fate of the once-promising startup amid mounting legal and financial pressures.
