Byju’s Founder to Appeal U.S. Court Order in $1 Billion Bankruptcy Battle

Why is Byju’s founder appealing the $1B U.S. court order?

Byju Raveendran is appealing a Delaware bankruptcy court’s default judgment that holds him personally liable for more than $1.07 billion. His legal team argues the ruling was issued without a fair opportunity to present a defense and says lenders led by GLAS Trust misrepresented how loan funds were used. Raveendran’s counsel maintains that the disputed money moved within the parent company, Think & Learn, rather than being used for personal benefit, and the founders are preparing counterclaims that could seek up to $2.5 billion against GLAS Trust and other parties.

Synopsys

This article breaks down the Delaware bankruptcy court’s $1.07 billion default judgment against Byju Raveendran, what led to it, how his legal team is responding, and what the case could mean for Indian startups that rely on cross-border lending. We’ve verified the core details against court filings and reporting from TechCrunch, Business Standard, and Storyboard18.

What the U.S. Court Actually Ordered

On November 20, 2025, the Delaware Bankruptcy Court entered a default judgment against Raveendran after finding he had repeatedly failed to comply with discovery orders and given, in the court’s words, incomplete and evasive responses. The judgment breaks down into two parts:

• $533 million tied to funds allegedly transferred out of Byju’s Alpha, a Delaware-registered special-purpose vehicle set up in 2021 to manage the company’s $1.2 billion term loan
• $540,647,109.29 connected to a separate limited-partnership stake, referred to in filings as the Camshaft LP Interest

US Bankruptcy Judge Brendan Shannon, who presided over the case, described the relief granted as “extraordinary,” noting that Raveendran had skipped hearings, missed extended deadlines, and left an earlier contempt order — which imposed $10,000 in daily sanctions — unpaid. The order followed a September 29 hearing on the lenders’ request for default judgment.

How This Case Began

The dispute traces back to a $1.2 billion term loan a consortium of U.S. lenders extended to Byju’s in 2021. In April 2025, the lenders — led by GLAS Trust — sued Raveendran and his wife, Byju’s co-founder Divya Gokulnath, in Delaware bankruptcy court, alleging that $533 million transferred by Byju’s U.S. unit in 2022 was never accounted for or recovered. The lenders’ filings went further, alleging the funds were effectively “roundtripped” back to Raveendran and his affiliates — an allegation his legal team has strongly rejected.

Byju’s Response: Why the Appeal Is Coming

Raveendran’s legal team, led by J. Michael McNutt of Lazareff Le Bars, says the Delaware court made reversible errors and relied on a prior contempt order rather than allowing a full hearing on the merits. Their core arguments:

• Raveendran was not given a proper opportunity to present a defense before the default judgment was entered
• The Alpha Fund proceeds were used by the parent company, Think & Learn, not for personal gain
• GLAS Trust was aware of how the funds were actually deployed, according to Raveendran’s counsel

Separately, and this is the part that raises the stakes considerably, Raveendran’s team says it is preparing claims against GLAS Trust and other parties across multiple jurisdictions, seeking at least $2.5 billion in damages. Counsel has indicated this would be filed before the end of 2025 absent a settlement, though as of this writing no such filing has been confirmed by the court.

Why a Once-$22 Billion Startup Ended Up Here

Byju’s was, at its peak, India’s most valuable startup, valued at roughly $22 billion. Its unraveling over the past two years has involved auditor resignations, investor write-downs, insolvency proceedings against its Indian entity, and now a personal judgment against its founder in a U.S. court. The through-line across most of these events is the same: aggressive, debt-fueled expansion followed by disputes over exactly where the borrowed money went and who is accountable for tracking it.

That’s the part worth sitting with if you’re building a company that plans to raise structured debt or operate subsidiaries across jurisdictions — documentation and fund-flow transparency aren’t back-office details. They’re the thing that determines who a court believes when the story gets contested.

What Happens Next

Two things are moving in parallel: Raveendran’s appeal of the default judgment, and his team’s preparation of a separate, larger counterclaim against GLAS Trust. Neither has been resolved. If the appeal fails, lenders would have a stronger basis to pursue enforcement, including against Byju’s U.S.-linked assets. If it succeeds, the case would likely become a reference point for how founders can contest cross-border creditor claims.

What to Watch Next

• Whether the $2.5 billion counterclaim is actually filed before the end of 2025, and in which jurisdictions
• The outcome of the appeal itself, and whether the appellate court finds the default judgment procedurally sound
• Any enforcement action GLAS Trust and other lenders take against Byju’s-linked assets while the appeal is pending
• Ripple effects on due-diligence standards Indian startups face when raising foreign debt, particularly around SPV structures and fund-flow reporting

This is a developing legal matter. Figures and claims above reflect court filings and reporting as of late November 2025; we’ll update this piece if the appeal outcome or counterclaim filing changes the picture.