US Court Orders Byju’s Founder Byju Raveendran to Pay Over $1 Billion in Major Legal Setback

In a significant legal decision, a US bankruptcy court in Delaware has entered a default judgement against Byju Raveendran, founder of the ed-tech firm Byju’s, ordering him to pay more than $1.07 billion.

The ruling comes after the court found that Mr Raveendran repeatedly failed to comply with its orders, including discovery requests and hearings.

Why the US Court Issued a Default Judgement

The dispute centres on a US subsidiary of Byju’s, known as Byju’s Alpha, which raised a roughly $1.2 billion term loan in 2021 from a consortium of global lenders.

Court filings alleged that about $533 million of that loan was transferred in 2022 to a US-based hedge fund called Camshaft Capital and then further moved overseas.

Because Mr Raveendran did not provide required documents or appear for hearings, the court ruled in default and assigned liability for that transfer plus additional claims of breach of duty.

Key Details of the $1 Billion Liability Order

• The default judgement values the liability at over $1.07 billion.
• The breakdown includes $533 million tied to the initial alleged diversion and about $540.6 million tied to other claims of misconduct.
• Mr Raveendran is also required to provide a full accounting of what happened to those funds, how they were used, where they went, and whether any returns were made.
• The court described the relief as “extraordinary … richly warranted” given the pattern of non-compliance.

What this means for Byju’s and its founder

While the judgement holds Mr Raveendran personally liable, this does not automatically mean the billion-dollar sum will be immediately paid. Enforcement will depend on tracing assets, locating them in jurisdictions, and navigating legal recognition abroad.

For Byju’s, which once boasted a valuation of around US$22 billion, this adds another major legal and reputational challenge.

Mr Raveendran and Byju’s have denied the allegations of wrongdoing, saying the transferred funds supported operations of the parent company in India rather than being misappropriated.

What happens next

• Creditors will now try to track down Mr Raveendran’s assets in different countries to recover the money.
• He may choose to appeal the ruling, but the court has already noted his repeated non-compliance.
• For Byju’s, this judgement could further impact investor confidence and ongoing efforts to restructure the company and resolve its financial troubles.

Byju’s Founders Sued in US Over $533 Million Transfer

Byju’s Alpha levels accusation against co-founders: took over $533 million in loans without compensation.

StartupTalky- Business News, Insights and StoriesSaksham Mishra