When a US bankruptcy judge in Delaware signed an order asking Byju Raveendran to personally pay more than $1.07 billion, it wasn’t just another line in Byju’s long list of problems – it was the sharpest legal blow yet to what was once India’s most celebrated edtech story.
The Delaware Bankruptcy Court entered a default judgment against the Byju’s founder after finding that he repeatedly refused to comply with discovery orders and failed to participate meaningfully in the litigation around a disputed $1.2 billion term loan raised in 2021 through a special-purpose US entity, Byju’s Alpha Inc.
At the same time, Byju’s is already fighting for survival in India:
- It is in corporate insolvency resolution over unpaid dues to the Board of Control for Cricket in India (BCCI).
- Tax authorities have filed claims of about $101 million (₹840+ crore) as part of the insolvency process, as total creditor claims swell to over $1.5 billion.
- The company and its founder are facing FEMA show-cause notices worth ₹9,362 crore from the Enforcement Directorate (ED) over alleged foreign exchange violations.
- Multiple investor and subsidiary disputes are ongoing before the NCLT/NCLAT and the Supreme Court of India.
Below is a detailed look at the US ruling and the full web of financial and legal troubles surrounding Byju’s.
From $22 Billion Poster Child to “Worth Zero”
In 2022, Byju’s was valued at around $22 billion, backed by heavyweight investors such as Prosus, General Atlantic, Peak XV (formerly Sequoia India), BlackRock and the Chan Zuckerberg Initiative.
Fuelled by cheap global capital and Covid-era demand for online learning, the company:
- Acquired Aakash Educational Services in a roughly $1 billion deal to enter test-prep.
- Bought US-based edtech assets for around $820 million.
- Spent aggressively on marketing and sponsorships, including Indian cricket team jersey rights and global campaigns featuring Lionel Messi and the FIFA World Cup.
But as capital tightened and growth slowed, Byju’s began to unravel:
- Financial statements for FY21 were delayed by around 22 months, triggering intense scrutiny from auditors, regulators, and investors.
- Its valuation was repeatedly marked down by investors and, by late 2024, Raveendran himself acknowledged that the company’s value had effectively fallen to zero.
- Massive layoffs shrank its workforce from about 60,000 employees to roughly 14,000 by early 2024, one of the steepest downsizings in India’s startup history.
This financial spiral set the stage for the loan default, lender disputes and, ultimately, the US court’s billion-dollar ruling.
Inside the Delaware Default Judgment
The $1.2 Billion Loan and the “Missing” $533 Million
In November 2021, Byju’s raised a $1.2 billion term loan B (TLB) via Byju’s Alpha Inc., a Delaware special-purpose vehicle. The SPV had no real operations; its job was essentially to hold the loan and channel the funds.
Lenders later alleged that:
- About $533 million of those funds were transferred out of Alpha and moved through entities including Camshaft Capital Fund, LP, a hedge fund in Miami, and then to other offshore structures and affiliates.
- These movements constituted fraudulent transfers and conversion, designed to take the money outside the reach of creditors.
In February 2025, the Delaware Bankruptcy Court issued a summary judgment against Riju Ravindran (Byju’s brother), Think & Learn Pvt Ltd, and Camshaft Capital, holding them liable for fraudulent transfer of $533 million and for breaching fiduciary duties.
Contempt Orders and Daily Fines
As the lenders and Alpha pushed further, they sought information and documents from Byju Raveendran personally. The court ordered him to comply with expedited discovery. When he resisted, the court:
- Held him in civil contempt in mid-2025 for failing to obey discovery orders.
- Directed him to pay $10,000 per day until he complied.
Judge Brendan Shannon noted that Raveendran, living abroad (primarily in Dubai), appeared to have “no intention” of satisfying the penalties or complying with discovery, leading sanctions to pile up into hundreds of thousands of dollars.
The “Extraordinary” Default Ruling
By November 2025, after repeated non-compliance and non-appearance, the court escalated matters and entered a default judgment exceeding $1.07 billion against him in the Byju’s Alpha adversary proceeding.
According to Business Standard’s summary of the order:
- $533 million was awarded on one count tied to allegedly fraudulent transfers of Alpha’s funds.
- Around $540.6 million was awarded on other counts related to asset transfers and conversion.
- The court also ordered a full accounting of the “Alpha funds” – the disputed pool of loan proceeds.
Lenders argue that the money was effectively “roundtripped” back to Raveendran and his affiliates, routed through layers of entities and an offshore trust. The founders vehemently deny this, insisting that the funds were used to support the group’s operations and marketing, not personal enrichment.
Raveendran’s Response and Planned Countersuit
Raveendran has:
- Denied wrongdoing and claimed the discovery demands were overbroad or impractical.
- Argued that the default ruling deprived him of a chance to present a full defence, and has indicated he will appeal.
- Threatened or planned counter-claims in US federal court against GLAS Trust and others, reportedly seeking up to $2.5 billion in damages on theories like racketeering and obstruction of justice.
Those counter-moves are still at a planning or early-stage litigation phase, and the default judgment remains a major overhang on his personal balance sheet.
Can This US Judgment Be Enforced in India?
The billion-dollar question for creditors is: Can they actually collect?
Legally, the road from Delaware to Bengaluru is not straightforward.
Non-Reciprocating Territory Problem
Under India’s Code of Civil Procedure (CPC), foreign money decrees from “reciprocating territories” can often be executed directly by Indian courts. The US is not on that list.
So, as Business Standard notes, GLAS and Byju’s Alpha cannot simply walk into an Indian court and execute the Delaware decree. They would likely need to:
- File a fresh civil suit in India against Raveendran.
- Use the US judgment as evidentiary material, not as an automatically executable decree.
Section 13 CPC: Natural Justice and Default Judgments
Indian courts will likely apply Section 13 CPC, which allows them to refuse to recognise a foreign judgement if:
- The foreign court lacked jurisdiction.
- The judgment wasn’t on the merits.
- It was obtained in breach of natural justice.
Because the Delaware order is a sanction-based default judgment (entered after discovery abuses), not a fully contested trial on merits, lawyers expect heightened scrutiny in India.
However, US bankruptcy courts have already issued detailed factual findings in related proceedings – for example, that transfers from Byju’s Alpha constituted actual fraudulent transfers and conversion, and that Think & Learn and affiliates were involved.
If Indian judges are persuaded that:
- Raveendran had genuine notice, and
- Repeatedly and wilfully chose non-compliance,
they may be less sympathetic to the “not on merits” argument than in a routine ex parte case. Still, any enforcement process in India would likely be long, contested, and uncertain.
Insolvency & Court Cases in India
BCCI Dues and Corporate Insolvency
The BCCI sponsorship dispute is what formally pushed Byju’s into India’s insolvency system.
- BCCI claimed Byju’s defaulted on ₹158 crore in sponsorship payments for the Indian cricket team jersey rights.
- In July 2024, the NCLT Bengaluru bench admitted BCCI’s petition and commenced a Corporate Insolvency Resolution Process (CIRP) against Think & Learn Pvt Ltd, appointing an interim resolution professional (IRP).
Over time, the insolvency has become highly politicised and litigious:
- Byju’s founders initially negotiated a settlement with BCCI and got insolvency halted by the NCLAT, but the Supreme Court later set aside that settlement, holding that it should have gone through the insolvency framework and the resolution professional.
- In 2025, the Supreme Court admitted challenges from the promoters over aspects of the insolvency process but refused to quash it outright, allowing it to continue under judicial supervision.
Tax Claims and Other Creditors
As the insolvency process progressed, Indian tax agencies also lined up:
- The central revenue department and Karnataka tax authorities together filed claims of around $101 million (over ₹840 crore).
- Overall, more than 1,800 creditors lodged claims totalling over $1.5 billion against Byju’s.
Vendors, employees, landlords, and service providers are all in the queue, making this one of the most complex startup insolvencies India has ever seen.
Regulatory and Investigative Heat
FEMA Show-Cause Notices from ED
In November 2023, the Enforcement Directorate issued show-cause notices to Think & Learn and Byju Raveendran alleging FEMA violations worth ₹9,362.35 crore.
Investigators flagged issues around:
- Foreign direct investment inflows,
- Overseas direct investments and acquisitions, and
- Non-realisation of export proceeds.
These are still allegations at the notice stage, not findings of guilt. The outcome depends on adjudication under FEMA, which can lead to hefty penalties if violations are established.
MCA & Corporate Governance
India’s Ministry of Corporate Affairs (MCA) initiated an extensive probe into Byju’s accounting and governance practices. According to reports, the year-long investigation:
- Did not find conclusive evidence of fund siphoning or accounting fraud,
- But did flag serious corporate governance lapses and weaknesses in internal controls.
So, while the government has publicly stopped short of calling it a “scam”, the governance red flags have severely damaged investor trust.
ICAI Disciplinary Proceedings
The Institute of Chartered Accountants of India (ICAI) is separately probing alleged auditing lapses in Byju’s books, triggered by the 22-month delay in FY21 results and questions around revenue recognition.
ICAI’s disciplinary committee is still working through the case. Depending on its findings, auditors could face professional sanctions, and the probe may indirectly shape how courts view the credibility of Byju’s accounts.
Layoffs, Cash Crunch, and Valuation Collapse
To survive the twin shocks of loan disputes and funding winter, Byju’s has been in extreme belt-tightening mode:
- Multiple layoff rounds have collectively removed tens of thousands of jobs, with the workforce down from about 60,000 to 14,000 by early 2024.
- Fresh layoff rounds in early 2024 reportedly took place over phone calls, with little or no notice period, adding to public backlash.
- The company has shut or scaled down international operations and ancillary businesses to conserve cash.
Investors, meanwhile, have marked down their stakes, and Byju’s has tried to raise emergency money via a deeply discounted rights issue of $200 million, which itself became the subject of legal fights.
Investor, Governance & Subsidiary Battles
Oppression and Mismanagement Petitions
A group of large investors – Prosus, General Atlantic, Sofina and Peak XV, backed by others such as Tiger Global and Owl Ventures – filed oppression and mismanagement petitions in the NCLT Bengaluru in early 2024.
They have sought, among other things:
- Removal of Byju Raveendran as CEO,
- Reconstitution of the board, and
- Setting aside the controversial rights issue.
When shareholders convened an extraordinary general meeting (EGM) in February 2024 and voted to oust Raveendran, the company called the meeting “invalid”, citing internal requirements that at least one founder-director be present (none were). The Karnataka High Court temporarily ordered that resolutions would not take effect until further hearings, effectively freezing the coup.
Aakash Educational Services Dispute
The Aakash acquisition – originally meant to be Byju’s crown jewel – has turned into another legal battlefield.
Key strands include:
- Disputes between Byju’s, Manipal Group and other Aakash shareholders over control, rights issues, and amendments to Aakash’s Articles of Association.
- NCLT and NCLAT orders preserving the status quo on Byju’s 25% stake in Aakash and restricting changes that would dilute that stake.
- In October 2025, NCLT declined interim relief to Byju’s and did not stop Aakash from going ahead with a rights issue that could significantly dilute Byju’s shareholding, further eroding the value of one of its last key assets.
These disputes matter because any resolution plan in the insolvency process has to take into account what, if anything, Byju’s still retains in Aakash.
Beyond India and the US: Any Other Major Jurisdictions?
So far, the core legal theatres are:
- United States – the Delaware bankruptcy court proceedings over the $1.2 billion loan, fraudulent transfer findings, contempt orders, and the latest $1.07 billion default judgment.
- India – insolvency proceedings, investor oppression cases, BCCI dispute, tax claims, ED FEMA notices, MCA & ICAI probes, and multiple NCLT/NCLAT/Supreme Court matters.
There have been references to funds moving through entities in the UK, Singapore and other offshore jurisdictions, but as of now, major public litigation hubs remain India and the US, with other jurisdictions mostly appearing in the background as part of fund-flow narratives rather than standalone court cases.
What It All Means – and What Comes Next
The US default judgment marks a turning point for three reasons:
- Personal Liability: It squarely targets Byju Raveendran as an individual, not just the corporate entities, increasing pressure on his personal assets and his negotiating leverage with lenders.
- Narrative Shift in Courts: US courts have already made detailed findings of fraudulent transfers and breach of fiduciary duty in related cases. Those judicial narratives will inevitably colour how Indian courts, investors, and regulators perceive the group’s conduct – even though Indian authorities so far have stopped short of branding it fraud.
- Template for Future Cross-Border Cases: The Byju’s saga shows how offshore borrowing via SPVs, aggressive marketing spend, and weak governance can collide with multi-jurisdictional enforcement. Indian founders using similar structures will be watching closely.
On the other side, the founders still have some cards:
- They can appeal the default judgment in the US.
- They can try to contest any enforcement in India, invoking Section 13 CPC and principles of natural justice.
- They remain engaged in litigation that could, in theory, push some blame onto advisors, trustees, and counterparties.
But each of those steps means more time, legal cost, and uncertainty, while the underlying business shrinks, employees leave, and brand trust erodes.
For now, one thing is clear:
The headline “US Court Orders Byju’s Founder To Pay Over $1 Billion” is not an isolated episode. It is the culmination of years of aggressive expansion, opaque finances, and escalating disputes – playing out simultaneously in bankruptcy courts in Delaware and tribunals and regulators across India.
