Byju's Founder Hit with $1.07B Bill in US Bankruptcy Ruling

Byju Raveendran, the embattled founder of Indian ed-tech giant Byju's, has been ordered by a U.S. bankruptcy court to pay over $1.07 billion in a case related to the company's 2021 term loan. The Delaware bankruptcy judge issued a default judgment after finding that Raveendran had repeatedly ignored court orders and provided evasive, incomplete responses regarding $533 million that Byju's U.S. unit allegedly transferred in 2022 and never recovered. The judge also cited issues with a separate limited-partnership stake later valued at roughly $540.6 million. According to court documents, Raveendran has denied wrongdoing and accused lenders of misleading the court. He has vowed to appeal the ruling, which marks a dramatic fall for a once-prominent figure in India's startup boom. "We strongly disagree with the court's decision and will appeal it," Raveendran said in a statement. "We are confident that the facts will ultimately prevail, and we will clear our name." Byju's co-founder Divya Gokulnath also denied any wrongdoing, stating that the company had acted in good faith and followed all applicable laws and regulations. The ruling stems from a lawsuit filed by a group of U.S. lenders led by GLAS Trust in April this year. The lenders sought to claw back funds linked to the $1.2 billion term loan they extended to Byju's in 2021. The loan was part of a larger financing package that helped Byju's expand its operations in the United States. However, the company allegedly failed to recover $533 million of the loan proceeds, which were transferred to its U.S. unit in 2022. Byju's has been facing financial difficulties in recent years, and the company has been under pressure to repay its debts. The Indian ed-tech giant has been valued at over $20 billion, but its financial struggles have raised concerns about the sustainability of the ed-tech industry in India. The company has been expanding its operations in the United States, but its financial woes have sparked concerns about its ability to repay its debts. Industry experts say that the ruling has significant implications for the ed-tech industry in India. "This ruling highlights the risks associated with the ed-tech industry in India," said Rohan Bhattacharya, a technology analyst at a leading research firm. "Companies in this space are highly leveraged, and they face significant risks if they fail to manage their finances effectively." Bhattacharya added that the ruling could lead to a re-evaluation of the business models used by ed-tech companies in India. The current status of the case is that Raveendran has been ordered to pay over $1.07 billion, and he has vowed to appeal the ruling. The appeal process is expected to take several months, and it remains to be seen how the case will ultimately be resolved. In the meantime, Byju's continues to operate its business as usual, and the company has not commented on the impact of the ruling on its financial situation.