Delaware court issues a $1.07 billion default judgment against the Byju’s founder for failing to comply with discovery orders; company calls ruling “premature” and plans to challenge it.
US Court Directs Byju Raveendran to Pay Over $1 Billion
A U.S. court in Delaware has ordered Byju’s founder, Byju Raveendran, to pay more than $1.07 billion after he allegedly failed to comply with court-mandated discovery requirements in a case filed by Byju’s Alpha and GLAS Trust. The case revolves around alleged diversion and misuse of loan funds linked to Byju’s U.S. operations.
The court noted repeated non-submission of financial documents and records, leading to a default judgment in favour of the creditors.
Breakdown of the Judgment
- $533 million awarded on one count
- $540.6 million on additional counts involving fund transfers
- Mandatory submission of a complete, accurate accounting of the “Alpha Funds,” including proceeds from “Camshaft LP Interest”
- Prior $10,000 per day contempt fine for non-compliance, which has reportedly accumulated significantly
The ruling has intensified pressure on the company and its founder, adding to ongoing financial troubles.
Byju Raveendran Denies Wrongdoing, Calls Judgment ‘Premature’
Reacting to the order, Raveendran said the ruling was “premature” and claimed he was not given a fair chance to present his case.
His legal team alleges:
- The court proceedings were fast-tracked, affecting their ability to defend
- They will be filing an appeal
- They plan to pursue counterclaims worth up to $2.5 billion in other jurisdictions
Byju’s has distanced itself, stating the case involves personal guarantees, not company operations.
Impact of the Judgment on Byju’s and Its Founder
This court ruling marks one of the most severe legal challenges faced by Byju Raveendran. It raises multiple red flags:
- Financial Pressure: A $1-billion-plus payout could heavily impact his personal finances and may constrain his ability to raise further capital.
- Creditor Leverage: With this ruling, creditors could gain stronger footing in recovering money from Byju’s — especially since they already hold various claims.
- Reputation Risk: Such a high-profile judgment damages his credibility and may erode investor confidence, potentially affecting future fundraising or partnerships.
- Strategic Dispute: Byju’s forthcoming counterclaims in other regions could escalate the legal battle and lead to prolonged litigation.
- Market Signal: The case underscores significant governance concerns in the edtech unicorn — and may prompt tighter scrutiny from regulators and investors.
