US Court Scraps $1 Bn Damages Order Against Byju Raveendran

In a perhaps long-awaited sigh of relief, US’ Delaware court has reversed its earlier default ruling judgement directing BYJU’S founder Byju Raveendran to pay over $1 Bn in damages, clarifying that damages were never actually assessed or awarded in the first place. The ruling resets a key pillar of the long-running legal battle and clears the way for a fresh damages trial beginning January 2026 to determine whether any penalty should be imposed at all.

The reversal undercuts a central assumption surrounding the case—that liability had already crystallised into a billion dollar judgment. According to the court, no such determination was ever made. Raveendran’s legal team is now portraying the order as a reset, arguing that earlier proceedings were shaped by incomplete or distorted information.

“During the damages proceedings starting January 2026, we intend to demonstrate to the Court that not only have the Plaintiffs suffered no damage whatsoever due to actions of Raveendran, but also that the Plaintiffs have intentionally misled the Court in this proceeding and other adversary proceedings,” his litigation advisor Michael McNutt said.

In its latest order, the court explicitly withdrew references to the $1 Bn figure and confirmed that the next phase will focus on whether the plaintiffs suffered any quantifiable harm. Raveendran’s council has framed the development as an opportunity to contest the allegations from the ground up.

Further, his team has now accused GLAS Trust and certain lenders of withholding and misrepresenting facts, alleging that their actions misled courts in multiple jurisdictions and deepened Byju’s financial crisis. They claim the fallout included the loss of around 85,000 jobs, disruption to the learning journeys of nearly 250 Mn students, and the destruction of “tens of Bns” of dollars in enterprise value.

McNutt added that the legal strategy of the founder would see arguments over misleading Courts in India and elsewhere to gain advantage in those proceedings by harassing and damaging Byju Raveendran, Divya Gokulnath, and Riju Ravindran. “We reserve the right to seek sanctions against Plaintiff’s counsel for their conduct in these proceedings. We will seek the necessary remedy in the Delaware Courts and through the $2.5 Bn lawsuit that we intend to file prior to the end of the year,” McNutt added.

A central flashpoint in the next round of litigation will be the disputed $533 Mn linked to BYJU’S Alpha Funds. Raveendran plans to present evidence before US courts asserting that GLAS Trust and its Resolution Professional (RP) in India have mischaracterised how the funds were used. According to his filings, the money was invested in Think & Learn in compliance with Indian law and was not diverted for personal gain. 

His team also points to financial records showing that Raveendran and entities linked to him invested more than $475 Mn into the company during the same period, countering allegations of misuse.

This material will form the basis of a full appeal against the amended Delaware Bankruptcy Court judgment and a planned $2.5 Bn lawsuit against parties he alleges were responsible for driving the narrative of wrongdoing. The same evidence, his team said, will be submitted to Indian courts in the coming weeks. 

This comes after Raveendran has categorically denied allegations made in the US Delaware Bankruptcy Court that he diverted $533 Mn belonging to the edtech’s US-based entity BYJU’S Alpha, calling the claims “false, misleading and defamatory”.

In April, BYJU’S Alpha sued Raveendran, his wife and cofounder Gokulnath and advisor Anita Kishore for allegedly ‘misappropriating’ $533 Mn.

BYJU’S, once one of the most valuable Indian startups, has effectively unravelled after years of aggressive expansion, opaque financial practices and rising debt. The company’s downfall accelerated when auditors and investors began flagging delayed filings, undisclosed revenue recognition practices, and mounting losses across its acquired subsidiaries.

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