Delaware court reverses $1 billion judgment against Byju Raveendran

Over a fortnight after directing Byju’s founder Byju Raveendran to pay over $1.07 billion for alleged diversion of funds from Byju’s Alpha in a default judgement -- issued after repeated non-compliance of court directions -- a US bankruptcy court has reversed its judgment after fresh submissions from the trouble-torn startup.

 

According to a statement from the founders of Think and Learn Pvt Ltd, the parent firm of Byju’s, the US court agreed that damages had not been determined and ordered a new phase to commence in early January 2026 to determine any damages related to claims against Raveendran.

 

The Delaware bankruptcy court had given the earlier judgement after Byju’s Alpha and US lender GLAS Trust Company LLC sought repayment of funds they allege were improperly diverted. The court had found that Raveendran was evasive on multiple occasions and awarded $533 million on one count and $540.6 million on three other counts while also ordering a full accounting of the disputed Alpha Funds.

 

Byju’s Alpha was incorporated in Delaware in 2021 as a special-purpose vehicle for a $1.2 billion term loan. Lenders later took control and alleged $533 million was “round-tripped” to Raveendran and his affiliates, a claim the founders reject.

 

After the recent judgement, the legal team of Raveendran alleged that GLAS Trust and the lenders withheld or misrepresented information, misleading courts and the public, and contributing to the collapse of the business, the loss of roughly 85,000 jobs, impacting 250 million students, and the destruction of tens of billions in enterprise value.

 

Raveendran is also considering further action against GLAS Trust and others for that conduct.

 

“The significance of the court’s decision to amend the judgement cannot be overstated. Byju Raveendran today has not been found liable to pay a single dollar in damages to the plaintiffs. During the damages proceedings starting January 2026, we intend to demonstrate to the court that not only have the plaintiffs suffered no damage whatsoever due to actions of Byju Raveendran, but also that the plaintiffs have intentionally misled the court in this proceeding and other adversary proceedings.

 

“We also intend to demonstrate that these plaintiffs have sought to mislead courts in India and elsewhere to gain advantage in those court proceedings by harassing and damaging Byju Raveendran, Divya Gokulnath, and Riju Ravindran. We reserve the right to seek sanctions against plaintiff’s counsel for their conduct in these proceedings. We will seek the necessary remedy in the Delaware Courts and through the $2.5 billion lawsuit that we intend to file prior to the end of the year,” stated Michael McNutt, litigation advisor for Byju Raveendran.

 

Raveendran has said that he will submit evidence before the US courts, to prove that GLAS Trust and the Resolution Professional (RP) repeatedly misled the Delaware Court, Indian and other courts, and the public by falsely alleging that $533 million (Alpha Funds) was diverted by the founders for their personal benefit.

 

The legal team said that GLAS Trust’s sworn statements that it “does not know” where the money went are simply false.

 

It alleged that a review of information in the possession of GLAS Trust since at least April 2025 clearly demonstrates that the monies lent to Alpha (and sent by OCI to companies owned by Byju Raveendran) were indeed invested in Think & Learn in compliance with all relevant Indian laws and not “siphoned off” to the founders.

 

It also alleged that evidence obtained by GLAS Trust’s own lawyers in other adversarial proceedings and later obtained by Raveendran and his counsel clearly demonstrates that GLAS Trust and Shailendra Ajmera, the RP of Think & Learn (TLPL), had full visibility into the use of the funds from the Alpha Loan guaranteed by TLPL.

 

In addition, the legal team said that the financial records of Think & Learn available publicly verify that Raveendran and entities controlled by him invested in excess of $475 million by purchasing shares in TLPL in the same period. It said the claims of the RP (resolution professional) of TLPL against the founders in relation to the monies are baseless.

 

This evidence will be submitted as part of a full appeal against the entire amended judgment of the Delaware bankruptcy court of December 8, 2025, and as part of the claim to be filed against relevant parties previously announced with a value of over $2.5 billion.

 

Raveendran will also share the same evidence with the Indian courts in the coming weeks.