CHENNAI: A US bankruptcy court in Delaware has issued a default judgment ordering Byju Raveendran, founder of the edtech company Byju’s, to pay a little over one billion dollars after finding that he repeatedly failed to comply with court directives in a long-running dispute with lenders. The order, which follows months of missed deadlines, unfulfilled discovery obligations and non-appearance at hearings, stems from allegations that hundreds of millions of dollars borrowed through Byju’s US entity were improperly moved out of lender control and routed through opaque structures, reports said.
The dispute traces back to a large Term Loan B facility raised by Byju’s Alpha, a US subsidiary of the company, from a consortium of global lenders. Out of this loan, roughly 533 million dollars was transferred in 2022 to accounts later linked to the small Miami-based hedge fund Camshaft Capital. Subsequent court filings described these transfers as fraudulent movements meant to hide assets from lenders, and earlier rulings in the same court had found that executives tied to Byju’s breached fiduciary duties by participating in these transfers. The new judgment assigns 533 million dollars to this count and adds approximately 540 million dollars more on additional counts linked to the Camshaft transaction, collectively pushing the liability to just over one billion dollars.
The court noted that Raveendran’s non-compliance was not incidental but, in its words, a willful pattern of delay, obstruction and refusal to provide information. Prior attempts to force compliance — including a civil-contempt penalty of ten thousand dollars per day — were ignored. The judge emphasised that even after extensive opportunities, Raveendran did not submit a full accounting of what happened to the “Alpha Funds,” nor did he cooperate with discovery obligations that sought clarity on how the loan proceeds were used, who exercised control over the transferred amounts and whether any money was returned through round-tripping. The court therefore concluded that a default judgment was the only effective remedy.
The broader context of the case is equally significant. Lenders have argued for over a year that more than half a billion dollars was spirited out of the United States soon after being drawn from the term loan, and they have described a web of transfers that ended in entities controlled by or associated with Raveendran and his close circle. Media reports have also highlighted statements from a UK-based intermediary claiming that large sums were round-tripped back to Byju’s at Raveendran’s direction, raising further questions about whether the transactions were structured to obscure financial flows. Raveendran and Byju’s have denied wrongdoing and maintain that the funds ultimately supported operations in the Indian parent company, Think & Learn Pvt. Ltd., rather than being diverted for personal benefit.
The immediate concern now shifts to enforcement. A default judgment does not automatically result in payment, and collecting over a billion dollars across jurisdictions is complex. If Raveendran holds assets outside the United States — whether in India, the Middle East or other financial centres — lenders will need to initiate recognition and enforcement proceedings in those regions. Depending on the local laws and the location of assets, enforcement could take years. At the same time, the accounting order included in the judgment gives lenders a strong tool: if Raveendran is compelled to disclose a detailed trail of the Alpha Funds, it could enable creditors to identify recoverable assets or challenge earlier transfers as fraudulent conveyances.
For Byju’s as a company, the development compounds an already severe financial and operational crisis. Back home, insolvency proceedings are underway in India after the National Company Law Appellate Tribunal upheld the process despite the company’s attempt at a settlement. The US ruling adds a new layer of legal pressure, potentially affecting investor sentiment, attracting regulatory scrutiny, and limiting the company’s ability to negotiate restructuring plans. The reputational damage is also significant: once celebrated as India’s most valuable startup, Byju’s is now facing growing questions about governance, transparency and the handling of global capital.
For the lenders, the ruling marks a turning point. With a clear judicial finding and a large enforceable award, they now have substantial leverage to pursue recovery, negotiate a settlement or seek asset freezes in multiple jurisdictions. The judgment also strengthens their strategic position in ongoing lawsuits, including those alleging that Raveendran and other directors orchestrated a scheme to move money out of creditor reach.
Although the ruling represents a major escalation, the road ahead remains uncertain. Raveendran could attempt to challenge the default judgment, though success would be difficult given the documented non-compliance. A negotiated settlement is possible if both sides find mutual benefit in reducing litigation risk. Alternatively, creditors may press ahead with global asset-tracing efforts that could drag on for years.
What is clear is that the judgment has significantly intensified the legal, financial and reputational stakes for Byju Raveendran and the company he founded, while giving creditors their strongest foothold yet in a dispute that has reshaped the trajectory of one of India’s most prominent startups.