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Byju Raveendran, the embattled founder of Indian ed-tech giant Byju\u2019s, has blasted a U.S. bankruptcy court\u2019s order directing him to pay more than $1.07 billion. He is denying wrongdoing, accusing lenders of misleading the court, and vowing to appeal a ruling that marks a dramatic fall for a onetime poster boy of India\u2019s startup boom.<\/p>\n
The Delaware bankruptcy judge issued a default judgment after finding that Raveendran had repeatedly ignored court orders and provided \u201cevasive, incomplete\u201d responses regarding about $533 million that Byju\u2019s U.S. unit allegedly transferred in 2022 and never recovered. The judge also cited issues with a separate limited-partnership stake later valued at roughly $540.6 million. The ruling, dated November 20, stems from legal action by lenders seeking to claw back funds linked to the $1.2 billion term loan they extended to the ed-tech startup in 2021.<\/p>\n
Earlier this year, in April, a group of U.S. lenders led by GLAS Trust sued<\/a> Raveendran and his wife, Byju\u2019s co-founder Divya Gokulnath, in the Delaware bankruptcy court over the missing $533 million in loan proceeds. The couple denied wrongdoing at the time and accused lenders of attempting a hostile takeover of the company. They later said they planned to pursue a $2.5 billion lawsuit against GLAS Trust and others in India and other jurisdictions, though no such filing has publicly surfaced. This was in addition to the complaint Byju\u2019s filed in the New York Supreme Court<\/a> challenging the acceleration of the term loan in 2023.<\/p>\n The court\u2019s latest order followed a September 29 hearing on the default request, where the judge cited a months-long pattern of noncompliance. The judge noted that Raveendran skipped hearings, missed extended deadlines, and ignored a prior contempt order imposing $10,000 in daily sanctions that remain unpaid.<\/p>\n U.S. Bankruptcy Judge Brendan Shannon said the relief granted in the case was \u201cextraordinary,\u201d adding that \u201cthe circumstances of this case are, frankly, unique and unlike anything the undersigned has encountered before, thereby making such relief\u2026 richly warranted.\u201d The judge has given the parties seven days to respond to the ruling.<\/p>\n \u201cWe consider that the U.S. Court erred in its judgment of this matter and will be filing the necessary appeals and other contestations related to this judgment and related orders,\u201d said J. Michael McNutt, senior litigation advisor at Lazareff Le Bars, representing Raveendran, in a prepared statement to TechCrunch. \u201cThe court, in our view, ignored relevant facts.\u201d<\/p>\n Raveendran\u2019s legal counsel argued that the court issued the judgment without giving him an opportunity to present a defense and instead relied on an earlier contempt order. The counsel also argued that the ruling failed to acknowledge that GLAS Trust was aware the Alpha loan funds were not used for the personal benefit of Raveendran or other founders but rather for Think & Learn, the startup\u2019s parent company, the counsel said.<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco<\/span> The counsel said Byju\u2019s 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.<\/p>\n Nonetheless, the default judgment marks a stunning fall for Raveendran and his eponymous company, once India\u2019s most valuable startup with a $22 billion valuation<\/a> and backed by global investors including Tiger Global, the Chan Zuckerberg Initiative, and Prosus. The company is now mired in lawsuits, funding droughts, mass layoffs, and a battle for control as lenders and creditors race to recover what they can.<\/p>\n Raveendran previously challenged the Delaware court\u2019s jurisdiction, but the judge rejected that argument in an earlier ruling, writing that \u201cRaveendran\u2019s conduct that gives rise to the litigation here relates to his activities \u2026 in the United States fundraising and serving as a director, officer, or manager of a United States corporation.\u201d<\/p>\n Earlier this week, a filing in the Delaware bankruptcy case alleged that most of the $533 million missing from Byju\u2019s U.S. unit, Alpha, was \u201cround-tripped back<\/a> to Byju Raveendran and associates.\u201d In a response, Raveendran denied the allegation, saying the funds were not used for personal gain.<\/p>\n Meanwhile in India, Byju\u2019s is undergoing a court-supervised sale process after insolvency proceedings<\/a> began last year, with early bidders including Manipal Education and Medical Group<\/a> (MEMG) and Ronnie Screwvala\u2019s UpGrad<\/a>.<\/p>\n<\/div>\n
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