American lenders have taken legal action against Byju Raveendran, the founder of the Indian education-tech company Byju’s, and his wife, Divya Gokulnath, in a US bankruptcy court. The lawsuit, filed in Wilmington, Delaware, accused the couple of being personally responsible for more than $500 million in missing loan proceeds.
The lawsuit underscored ongoing allegations against Raveendran and Byju’s, where two US bankruptcy judges have found that the company unlawfully transferred $533 million away from creditors. The legal efforts aim to hold Raveendran, Gokulnath, and another company official accountable for their roles in the financial discrepancies.
“This is an action to hold three powerful BYJU’s executives accountable for having purposefully caused the Debtor (BYJU’S Alpha) to fraudulently transfer an asset valued at over half a billion dollars for no consideration,” stated the lawsuit filed on April 9, 2025.
The dispute centres around a defaulted $1.2 billion loan, with lenders striving for years to recover the funds. Byju’s is accused of fraudulently transferring part of the loan proceeds to a hedge fund in Miami, a move deemed unlawful by US Bankruptcy Judge John Dorsey in February.
The lawsuit, filed on April 9, 2025, sought to hold three high-ranking executives at BYJU’s accountable for deliberately causing the Debtor (BYJU’S Alpha) to fraudulently transfer an asset worth more than $500 million without receiving any compensation.
“In light of the court’s recent decision, there can be no doubt that they acted unlawfully and tried to cover their tracks,” the lenders asserted.
Byju’s has vehemently refuted the claims made in a recent U.S. lawsuit accusing the company’s top leadership of embezzling $533 million. Labeling the case as “baseless” and “frivolous,” Byju’s asserted that it is an unfounded attempt by lender representatives to unlawfully gain control of the firm using what they deem as “nefarious” tactics.
In response to the lawsuit filed by lenders against its U.S.-based entity Byju’s Alpha Inc., the company issued a strongly worded statement, stating, “This lawsuit is merely a continuation of the falsehoods perpetuated by GLAS, the representative of disgraced lenders in the U.S., over an extended period of time.”
The lawsuit, brought by BYJU’S Alpha in the US Bankruptcy Court for the District of Delaware on behalf of the Term Loan lenders, comes after a ruling on February 28 which determined that Riju Ravindran, BYJU’S, and Camshaft Fund were involved in multiple fraudulent transfers and conversions of $533 million in loan funds. It was also found that Ravindran violated his fiduciary duties as a director of BYJU’S Alpha.
BYJU’S Alpha, a special purpose vehicle (SPV) established in Delaware to receive funds from a $1.2 billion Term Loan B, was taken over by creditors and placed under Chapter 11 bankruptcy proceedings after previously controlling the $533 million at issue.
The lenders argue that the couple’s actions were deliberate attempts to prevent repayment and have filed this lawsuit as part of their ongoing efforts to recover the funds. Despite these efforts, Raveendran and his wife have consistently refuted the allegations. In response, they claim that the lawsuit is a strategic ploy by the lenders to wrest control of Byju’s through questionable means, stating, “The lender claims are completely baseless and untrue.” This legal battle highlights the complexities surrounding the financial management and operations of Byju’s.
Byju’s is currently navigating bankruptcy proceedings in both the US and India. In the US, the lenders are attempting to liquidate domestic assets, including educational software companies acquired by Byju’s for $820 million, as a means of recouping payments. Simultaneously, efforts are underway within the Indian legal framework to assess the remaining value of the Byju’s enterprise, though the potential returns remain uncertain.
