A United States bankruptcy court in Delaware has issued a default judgment ordering Byju Raveendran, founder of the crisis-hit edtech giant Byju’s, to pay slightly over one billion dollars after he repeatedly ignored court orders in a bitter dispute with lenders.
The ruling follows months of missed deadlines, failure to provide discovery documents, and non-appearance at hearings. The court described Raveendran’s conduct as a deliberate pattern of obstruction in a case centred on allegations that hundreds of millions of dollars in loan funds were secretly moved beyond lenders’ reach through shadowy structures.
The dispute originated from a large Term Loan B raised by Byju’s Alpha, a US subsidiary, from global lenders. In 2022, approximately $533 million of these funds was transferred to accounts linked to a little-known Miami-based hedge fund Camshaft Capital.
Court filings labelled the transfers as fraudulent, intended to conceal assets. Earlier rulings had already found Byju’s executives breached fiduciary duties. The new judgment awards the original $533 million on that count and adds roughly $540 million on related claims, bringing total liability to just over one billion dollars.
“Willful Pattern of Delay and Obstruction”
The judge noted that Raveendran ignored even a daily $10,000 civil-contempt penalty, and failed to provide a full accounting of the missing “Alpha Funds” or explain who controlled the transferred money and whether any was round-tripped back.
With all lesser sanctions exhausted, the court concluded a default judgment was the only remaining remedy.
Enforcement battle shifts to global courts
While the billion-dollar award is now on record, actual recovery remains uncertain and could take years. Lenders will need to seek recognition of the US judgment in India, the Middle East, or any jurisdiction where Raveendran holds assets.
The judgement also compels detailed disclosure of the funds’ trail, potentially allowing creditors to claw back transfers as fraudulent conveyances or freeze newly identified assets.
Fresh blow to Byju’s amid Indian insolvency crisis
The US ruling piles pressure on Byju’s, which is already facing insolvency proceedings in India after the NCLAT upheld admission despite a last-minute settlement attempt.
Once India’s most valuable startup, Byju’s now grapples with collapsing investor confidence, mounting governance questions, and severe restrictions on restructuring options.
For lenders, the judgment delivers powerful leverage to pursue global recovery, negotiate settlements, or intensify parallel lawsuits alleging a systematic scheme to shield funds from creditor reach.
