US court orders Byju’s founder Byju Raveendran to pay over $1.07 billion. [Photo: X]
Byju’s founder, Byju Raveendran, is facing a major legal setback in the US. A Delaware bankruptcy court has held him personally liable for the movement and concealment of funds from Byju’s Alpha, the company’s US-based financing arm. The court has issued a default judgment ordering him to pay over $1.07 billion, marking one of the largest personal liabilities for an Indian entrepreneur in a US court.
A US bankruptcy court has ordered Byju’s founder, Byju Raveendran, to personally pay more than $1.07 billion after issuing a default judgment linked to missing funds from the company’s US financing arm, Byju’s Alpha. The ruling came from Judge Brendan Shannon of the Delaware Bankruptcy Court after Raveendran repeatedly failed to appear and did not submit the required documents.
A default judgment is issued when one party does not participate in the case or ignores court instructions. It allows the judge to rule without a full trial. Byju Raveendran denied all allegations and said he will appeal the decision.
According to court filings, the judge found Raveendran liable for the “movement and concealment” of money from Byju’s Alpha. The entity was incorporated in Delaware in 2021 as a special-purpose vehicle to manage a $1.2 billion term loan raised from a group of international lenders.
Byju’s Alpha had no business operations and existed mainly to hold the loan for the parent company, Think & Learn Private Limited (TLPL). However, around $533 million was moved out of Alpha to Camshaft Capital, a small hedge fund in Miami, and later transferred through related entities, including Inspilearn, and then to an offshore trust. Court documents state that no consideration or repayment was made to Alpha during these transfers.
Raveendran hit back at the ruling, saying the court did not consider crucial facts. He said the default judgment came through an “expedited” process that prevented him from defending himself.
In a statement, the company said, “The Court, in our view, ignored relevant facts. Byju Raveendran must be allowed to present a defence and has been denied the right to do so by expediting the trial.”
The company also argued that lenders already knew the money from Alpha was not used for the founders’ personal gain. “The Delaware Court Judgement also does not address the fact that GLAS Trust has been aware that the monies from the Alpha loans were not used by Byju Raveendran or any Founder of BYJU's for their personal gain but were used for the benefit of Think & Learn Private Limited (TLPL),” the statement said.
The dispute comes at a time when Byju’s is battling financial strain, investor exits and allegations of governance failures. The Alpha loan case has become the most serious international escalation against the company so far.
Lenders have argued for months that the money trail from Alpha raises questions about transparency and accountability. The transfers through a small hedge fund and multiple related entities form the core of the accusation that funds were “diverted” without proper explanation.
Industry analysts say this ruling could increase pressure on Indian regulators to examine Byju’s past transactions. Some believe the judgment may speed up negotiations on debt restructuring as lenders gain more legal leverage.
