A US federal bankruptcy court has set aside a $1 billion damages order against Byju Raveendran, founder of edtech major Byju’s, providing temporary relief in the ongoing legal tussle with the company’s lenders. The decision was delivered by a Delaware bankruptcy court on December 8, 2025, according to an official statement from Think and Learn Pvt Ltd, the parent company of Byju’s.
The ruling overturns a default judgment issued last month that had directed Raveendran to pay more than $1 billion, citing his alleged failure to cooperate with efforts to trace nearly half of a $1.2 billion term loan raised in 2021. A group of lenders led by GLAS Trust had accused Raveendran, co-founder Divya Gokulnath, and an associate of orchestrating the diversion of $533 million in loan proceeds.
Raveendran challenged the order, contending that the court did not grant him the 30-day period he had requested to appoint legal representation in the United States. After reviewing a motion to correct its November 20 ruling, the court agreed that the assessment of damages was premature and ordered the removal of sections imposing damages on him.
The court has now directed both parties to submit their respective positions on damages by January 7, 2026, after which a new phase of proceedings will commence. Any final judgment will be issued only after the damages briefing is completed.
Byju’s founders have repeatedly denied the allegations, describing them as baseless and maintaining that the loan proceeds were reinvested into Think and Learn to fund its $3 billion acquisition strategy. Raveendran is also considering counterclaims worth up to $2.5 billion against GLAS Trust, alleging that lenders made misleading representations to courts in the US, India, and other jurisdictions. Further hearings are expected in early 2026.
