The controversy centers on Byju’s Alpha, a US entity set up in 2021 to handle a $1.2 billion loan for expansions. Funds were reportedly moved in 2022 and 2023 without full recovery, prompting lender actions. For details on the loan, refer to filings at Business Standard.
Court Ruling and Its Impact
Judge Brendan Shannon in Delaware described the measures as necessary due to evasion patterns, ordering repayment and financial disclosures. This could influence Byju’s ongoing Indian asset sales, involving parties like Manipal Education.
Appeal Strategy and Counter-Actions
Raveendran’s lawyers claim the process was unfair and plan US appeals plus international suits for damages, potentially by late 2025, if unresolved.
Wider Implications for Byju’s
From a $22 billion valuation peak, Byju’s faces lawsuits, layoffs, and regulatory probes, reflecting risks in edtech growth.
Byju Raveendran, the founder of embattled Indian edtech giant Byju’s, has vowed to appeal a recent US court order mandating him to personally repay over $1.07 billion in a high-stakes bankruptcy case. The ruling, issued on November 20, 2025, by the Delaware Bankruptcy Court, stems from allegations of fund concealment and non-compliance with judicial directives, marking a significant escalation in the company’s ongoing financial turmoil. While lenders hail the decision as a step toward accountability, Raveendran’s camp decries it as procedurally flawed, setting the stage for prolonged legal battles across jurisdictions.
The case revolves around Byju’s Alpha Inc., a Delaware-based special-purpose vehicle established in 2021 with no operational activities. It was created to secure a $1.2 billion term loan from a group of US lenders, administered by GLAS Trust Company LLC. According to court documents, approximately $533 million of the loan proceeds was transferred in 2022 to entities like Camshaft Capital Fund and later to OCI Limited in Singapore and Inspilearn LLC, without returning equivalent value to Alpha.
A subsequent 2023 transfer involved a $540.6 million limited-partnership interest in the Camshaft hedge fund, which lenders have labeled a “sham” operation. These movements, lenders argue, were orchestrated by Raveendran and affiliates, including his wife Divya Gokulnath and former executive Anita Kishore, to obscure assets amid mounting debts.
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US Bankruptcy Judge Brendan Shannon, in granting the default judgment, cited Raveendran’s “strategic pattern of willful non-compliance” as justification for the extraordinary relief. This included repeated failures to attend hearings, provide required documents, and adhere to discovery obligations. A prior contempt order from July 2025 imposed $10,000 daily fines, which remain unpaid, highlighting the court’s frustration with lesser sanctions given Raveendran’s international residence.
The judgment not only demands repayment of the disputed amounts but also requires a full accounting of all funds transferred from Alpha, including subsequent uses and proceeds. Shannon dismissed Raveendran’s challenges to the court’s jurisdiction, noting his active involvement in US-based fundraising and management activities.
In response, Raveendran has strongly contested the allegations, maintaining that the funds were legitimately used to support Think & Learn Private Limited (TLPL), Byju’s Indian parent company, and not for personal enrichment. His attorney, J. Michael McNutt of Lazareff Le Bars, criticized the ruling for being rushed and overly dependent on the contempt finding, without allowing a substantive defense. They further accuse GLAS Trust of misleading the court and public, pointing out that the lender now controls TLPL and should be responsible for tracing the funds.
Applications for such disclosures are pending in Indian courts. Raveendran’s team is preparing an immediate appeal in the US, alongside potential counter-lawsuits seeking at least $2.5 billion in damages from GLAS and other lenders, to be filed by the end of 2025 in India and elsewhere if settlement talks fail. This builds on prior actions, such as a 2023 suit in the New York Supreme Court challenging the loan’s acceleration and disqualifying lender Redwood for alleged predatory practices.
The US order arrives amid Byju’s deepening crisis, which has transformed the once-celebrated startup, founded in 2011 as an online learning platform, into a symbol of edtech sector volatility. Valued at $22 billion at its 2022 peak, with investments from heavyweights like Tiger Global, the Chan Zuckerberg Initiative, and Prosus, Byju’s expanded aggressively through acquisitions during the COVID-19 boom.
However, a funding drought since late 2023, coupled with unpaid loan interest, mass layoffs, and regulatory scrutiny, has eroded its standing. In India, the National Company Law Tribunal (NCLT) admitted TLPL into insolvency proceedings in July 2024 following a petition by the Board of Control for Cricket in India (BCCI) over unpaid sponsorship dues, suspending Raveendran’s board control. The company is now undergoing a court-supervised auction, with initial interest from entities like Manipal Education and Medical Group and UpGrad, led by Ronnie Screwvala.
Further complicating matters, India’s Enforcement Directorate (ED) has investigated alleged violations of the Foreign Exchange Management Act (FEMA) amounting to ₹9,362 crore, issuing lookout notices against Raveendran in February 2024. Political figures, including actor-politician Pawan Kalyan, have voiced concerns over Byju’s partnerships and stability as early as 2024. Raveendran’s personal fortune, estimated at $2.1 billion in 2023, has reportedly plummeted to zero.
Public sentiment, as reflected on platforms like X (formerly Twitter), has been mixed, with many sharing news articles emphasizing the judgment’s gravity, while others rally behind Byju’s potential comeback or question lender tactics. Analysts view the ruling as underscoring the perils of cross-border financing for high-growth startups, where compliance lapses during rapid expansion can invite severe repercussions. Lenders see it as enforcing transparency, whereas Raveendran’s narrative positions it as an overreach in a lender-led takeover bid.
As of November 23, 2025, no formal appeal has been lodged, but preparations are advanced, with possibilities for out-of-court resolutions still on the table. The outcome could reshape Byju’s future and influence global perceptions of Indian startups navigating financial distress.
