A US bankruptcy court in Delaware has issued a default judgment against Byju Raveendran, founder of the edtech giant Byju’s, ordering him to pay more than $1 billion for failing to comply with court orders in a long-standing dispute with lenders. This ruling follows repeated instances of missed deadlines, failure to provide documents, and non-appearance at hearings related to allegations of fraudulent fund transfers through Byju’s US subsidiary, Byju’s Alpha.

The dispute centers around a Term Loan B facility raised by Byju’s Alpha, from which approximately $533 million was transferred in 2022 to accounts connected to a Miami-based hedge fund, Camshaft Capital. The court found these transfers intended to obscure assets from lenders. An additional roughly $540 million was attributed to further related transactions, pushing the total liability past $1 billion. The court described Raveendran’s conduct as a “willful pattern of delay, obstruction and refusal” to cooperate.

While Raveendran and Byju’s have denied wrongdoing, maintaining that the funds supported the Indian parent company’s operations rather than personal enrichment, the judgment has added significant pressure amid ongoing insolvency proceedings in India. This US ruling complicates Byju’s financial restructuring efforts and tarnishes its reputation, raising questions about governance and transparency at India’s former most valuable startup.

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Collecting the judgment amount will be challenging, as enforcement requires locating Raveendran’s assets internationally and navigating cross-border legal frameworks. The court has also ordered a detailed accounting of the disputed “Alpha Funds,” potentially enabling creditors to trace recoverable assets or challenge earlier transactions. This legal hold strengthens lenders’ position in this and other related lawsuits alleging money movement beyond creditor reach.

The road ahead remains uncertain. Raveendran could seek to challenge the default judgment, but given his documented non-cooperation, success appears unlikely. Alternatively, negotiations for settlement or prolonged asset tracing efforts could follow. The judgment underscores the escalating stakes in what has become a defining crisis for Byju’s founder and the company he built.

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