Byju’s founder, Byju Raveendran, is appealing a default judgment entered against him by a United States bankruptcy court, finding him personally liable for over $1.07 billion, the largest legal defeat yet for the besieged edtech founder. The ruling was issued by judge Brendan Shannon from the Delaware Bankruptcy court after Raveendran failed to comply with orders to appear and produce documents in a lawsuit brought against the financing arm of Byju, also known as Byju’s Alpha, based in the United States.
By default judgment, the court made its decision without a trial due to one party, Raveendran, in this case, failing to participate. Judge Shannon determined that Byju’s Alpha’s funds were improperly moved and concealed, including $533 million that was transferred to Camshaft Capital, a Miami-based hedge fund, which was later funneled through many affiliated entities and never paid back to Byju’s Alpha.
Background: How the funds issue started
Created in Delaware in 2021, Byju’s Alpha is a special-purpose vehicle set up to manage a $1.2 billion term loan from global lenders. The vehicle has no business operations; it simply acts as a conduit for receiving and managing the loan funds on behalf of Think & Learn Private Ltd (TLPL), the parent company of Byju’s.
Court documents allege that most of the loan was improperly taken out of Alpha without transparency or proper documentation, which triggered the current legal issues being pursued in courts across multiple countries.
GLAS Trust, on behalf of the lenders, has accused Raveendran of concealing information and improperly using the loan proceeds – allegations that ultimately led the court to impose a billion-dollar liability.
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Byju’s statement: Accusations of court deception
Raveendran has rejected all accusations, stating that the ruling was unjust, incomplete and made in “expedited circumstances” that prevented him from entering a defense. His legal team contends that:
• The court relied on misrepresentations by GLAS Trust.
• The damages claims were withdrawn in early 2025, so the ruling was premature.
• He was not afforded enough time to retain legal counsel and respond.
None of the contested funds were diverted for personal use and instead were for the benefit of TLPL.
His lawyer has provided commitments for a comprehensive appeal soon, and a sweeping counter-claim to the tune of $2.5 billion that accuses GLAS and its affiliates of racketeering, conspiring to obstruct justice, and damaging the reputations of the founders.
From here
The case is about to become multijurisdictional. The founders of Byju’s are preparing to launch additional cases in both India and the U.S. Meanwhile, the Indian courts are already considering applications to compel GLAS Trust and TLPL’s resolution to disclose the factual accounting of the diverted funds.
As one of India’s most prominent founders fights off a billion-dollar claim against him personally, the downstream impact is significant, beyond Byju’s potential viability or not, to the impact on global lenders.
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