A US bankruptcy court has overturned its earlier multi-billion-dollar judgment against Byju’s founder, Byju Raveendran, stating that the damages had not been properly determined. The court has now ordered a new phase to begin in early January 2026 to reassess the damages related to the allegations against Raveendran.
This reversal comes two weeks after a default judgment was issued due to repeated non-compliance with court orders. That earlier ruling had directed Raveendran to pay over $1.07 billion for the alleged misappropriation of funds belonging to Byju’s Alpha. After hearing new arguments from the struggling startup, the court decided to withdraw the default judgment.
According to a statement from the founders of Think and Learn Private Limited, Byju’s parent company, the court concluded that the damages had not been established and therefore ordered a fresh phase to determine the appropriate amount connected to the allegations.
The Delaware bankruptcy court’s initial ruling came after Byju’s Alpha and US lender GLAS Trust Company LLC demanded the return of funds they claimed were improperly diverted. The court had previously found that Raveendran was evasive on several occasions, imposing a fine of $533 million in one instance and $540.6 million in three other instances, 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 that $533 million had been improperly transferred to Raveendran and his associates—an allegation the founders have consistently denied.
Following the recent reversal, Raveendran’s legal team claimed that GLAS Trust and the lenders had concealed or misrepresented information, misleading both the court and the public. They argued that this contributed to the collapse of the business, the loss of approximately 85,000 jobs, the impact on 250 million students, and the loss of billions of dollars in company value. Source BS
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