Byju Raveendran, the founder of Indian ed-tech firm Byju’s, has been hit with a default judgment by a U.S. bankruptcy court ordering him to pay over US $1.07 billion. The ruling was issued by the Delaware court after finding that Raveendran repeatedly failed to comply with the legal proceedings, including neglecting court-ordered appearances and failing to submit required documents.
Key Highlights
- A US court ordered Byju Raveendran to pay over $1 billion after a default judgment.
- The ruling stems from disputes with lenders over alleged fund misuse and missed repayment obligations.
At the core of the case lies the transfer of US $533 million in loan proceeds from Byju’s U.S. subsidiary, Byju’s Alpha, to a Miami hedge fund named Camshaft Capital, and then onward to other entities. The court held Raveendran personally liable for directing these transactions and found evidence of “extraordinary” conduct that justified the high penalty.
Byju’s Alpha had been established in 2021 as part of a US-based term loan facility worth US $1.2 billion taken on by Byju’s. The loan was arranged with a consortium of global lenders, and the funds were meant to support the company’s international expansion. However, subsequent legal proceedings alleged that rather than being properly spent, a portion of the funds was diverted through the U.S. subsidiary and related entities.
The U.S. court’s decision does not mean immediate collection of the full US $1.07 billion; creditors will still need to enforce the judgment in jurisdictions where Raveendran holds assets. Nevertheless, the judgment marks a major inflection point in Byju’s legal and financial troubles and reflects the broader collapse of what was once India’s most-valued startup, at one time pegged at around US $22 billion.
Also Read: Judge States Byju's Official Hid $533 Mn, Breach of Duty to Lenders
In his defence, Raveendran has denied any wrongdoing and claims that funds were used for legitimate business purposes. Yet the court found that Raveendran’s non-cooperation, lack of transparency and repeated failures to comply with discovery orders warranted holding him personally accountable.
The verdict underscores the rising legal pressure on high-profile founders and companies who raised large sums during the pandemic but then struggled to manage debt, regulatory scrutiny, and governance expectations. It also raises significant questions about cross-border enforcement of judgments, fund flows, and investor protections in startup ecosystems.
