Byju Raveendran Vows to Fight $1.07 Billion U.S. Court Order as Legal Troubles Deepen

The founder of India’s once-high-flying ed-tech unicorn faces a major setback after a U.S. bankruptcy court issued a default judgment against him. Raveendran calls the ruling “erroneous” and plans to appeal as Byju’s global crisis intensifies.

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U.S. Court Issues Extraordinary Default Judgment

Byju Raveendran, the founder of Byju’s, is pushing back against a U.S. bankruptcy court order directing him to personally pay more than $1.07 billion, calling the ruling unfounded and accusing lenders of distorting facts.

The order, issued on November 20 by Judge Brendan Shannon of the Delaware Bankruptcy Court, stems from a long-running dispute over a $1.2 billion term loan raised by Byju’s U.S. subsidiary in 2021. The court found that Raveendran repeatedly disobeyed directives, failed to appear at scheduled hearings, and provided incomplete information about $533 million allegedly transferred out of the U.S. unit in 2022.

Judge Shannon, describing the circumstances as “unlike anything” he had encountered, approved a default judgment after months of what the court considered non-compliance — including ignored deadlines and an unpaid contempt-related penalty of $10,000 per day.

The ruling also referenced questions surrounding a limited-partnership holding valued at around $540.6 million.

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Raveendran Denies Wrongdoing, Claims Lenders Misled Court

Raveendran’s legal team strongly rejected the judgment.
In a statement shared with TechCrunch, J. Michael McNutt, senior litigation advisor at Lazareff Le Bars, said the court “overlooked significant facts” and did not give the founder a fair opportunity to present his defense.

According to the defense, the disputed funds were routed for the benefit of Think & Learn Pvt. Ltd., Byju’s parent company, not for the personal gain of Raveendran or other founders. They also argued that lenders—including the loan trustee GLAS Trust—were aware of how the funds were used.

Raveendran previously attempted to challenge the U.S. court’s jurisdiction, but the judge rejected the argument, noting that the transactions and alleged misconduct directly involved Raveendran’s activities in the United States.

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Lenders Accuse Founder of Concealing Funds

The legal battle escalated in April, when a consortium of U.S. lenders led by GLAS Trust sued Raveendran and his wife, co-founder Divya Gokulnath, accusing them of withholding $533 million in loan proceeds.

A recent filing in the same bankruptcy case alleged that most of the missing money was ultimately “round-tripped” back to Raveendran and his associates.
Raveendran vehemently denies this, insisting the funds were used legitimately for the business.

The couple has previously threatened to pursue a $2.5 billion damages claim against the lenders in India and other jurisdictions, though no such suit has yet appeared in public filings.

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A Fall From a $22 Billion Peak

The default judgment marks a stunning low point for Byju’s, once celebrated as India’s most valuable startup with investors such as Tiger Global, Prosus, and the Chan Zuckerberg Initiative.

Over the past 18 months, the company has faced:

• a severe funding crunch

• mass layoffs

• governance disputes

• debt-restructuring conflicts

• multiple regulatory and forensic audits

• insolvency proceedings in India

The company is now undergoing a court-monitored sale process in India, with early interest from Manipal Education and Medical Group (MEMG) and UpGrad, the firm led by Ronnie Screwvala.

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What Happens Next

The Delaware court has given involved parties seven days to respond to the order. Raveendran’s team says it is preparing multiple appeals and additional legal challenges across jurisdictions, aiming to reverse or stay the enforcement of the judgment.

Meanwhile, lenders remain focused on recovering whatever value they can, both in the U.S. litigation and through the insolvency proceedings in India.

Legal experts say the case could shape how Indian startups raise capital overseas, particularly regarding transparency, cross-border fund flows, and the willingness of international creditors to extend high-value loans to privately-held companies.