Byju Raveendran and Divya Gokulnath, co-founders of India’s once $22 billion edtech giant, are set to file a $2.5 billion lawsuit against Glas Trust and other investors/lenders. The suit will be filed in India and international courts, aiming to recover damages for alleged reputational and financial harm during ongoing insolvency and bankruptcy proceedings
📉 Why Now? What’s the Backstory?
- Allegations on the table: Glas Trust represents U.S. lenders (involved in a $1.2 billion term loan to Byju’s Alpha Inc.) and has accused the founders of orchestrating a scheme to conceal and misappropriate $533 million
- Counteraction by founders: The founders deny all claims and plan legal action to seek damage recovery, claiming “reprehensible and improper” conduct by Glas Trust in multiple jurisdictions
- Bankruptcy wars: Byju’s Alpha (U.S.) and Think & Learn (India) are subject to parallel bankruptcy proceedings. Glas Trust petitioned for civil contempt in Delaware; meanwhile, founders have appealed and are challenging its standing as a creditor in Indian courts
🛡️ Founders’ Core Claims
- Reputation under attack: The founders argue that the allegations have severely damaged both their personal and company image
- Creditor legitimacy challenged: They’re disputing Glas Trust’s right to represent the lender consortium and its presence in Indian insolvency proceedings
- Redundant U.S. court order: The founders are appealing the Delaware court’s civil contempt ruling, calling it duplicative and contesting its jurisdiction
- Fighting asset claims: They counter issues tied to alleged fraudulent asset transfers under Indian insolvency law
📊 What This Means
- High stakes legal battle: A $2.5 billion lawsuit signals the founders are mounting a serious counter-offensive.
- Prolonged proceedings: Both U.S. and Indian courts are now deeply involved, and outcomes could impact Byju’s restructuring timeline.
- Market implications: As scrutiny intensifies, resolution may shape investor and regulatory perceptions of India’s leading edtech player.
🔮 What to Watch
- Court filings: Legal documents from India and U.S. courts over the next weeks will clarify the core claims.
- Creditor status decision: NCLT’s ruling on Glas Trust’s creditor standing will be pivotal.
- Case timelines: Monitoring the Delaware contempt appeal and any parallel suits in other jurisdictions is key.
🏢 About Byju’s
Byju’s (Think & Learn Pvt. Ltd), founded in 2011 by Byju Raveendran and Divya Gokulnath, ballooned to a $22 billion valuation by 2022. Since late 2023, it’s faced funding challenges, laid off thousands, and entered insolvency, with its U.S. arm filing Chapter 11 in early 2024 Business Today
