In a significant legal development, a US court has reversed the $1 billion damage ruling against Byju Raveendran, founder of India’s ed-tech giant Byju’s. The Delaware Bankruptcy Court on December 8, 2025 granted relief to Raveendran by scrapping the previous damages award and ordering a new phase of proceedings in January 2026 to decide whether any damages are owed at all.
This reversal marks a major shift in the high-stakes international litigation surrounding the embattled education platform’s financial practices and investor disputes.
Why the $1B Damage Case Was Reversed
Earlier this year, the US bankruptcy court had issued a default judgment exceeding $1 billion against Byju Raveendran, citing his alleged failure to cooperate with discovery orders in a case related to a $1.2 billion US term loan. Lenders claimed that nearly half of this loan’s proceeds were unaccounted for, leading to accusations that Raveendran and others had refused to help locate the funds.
However, in its recent order, the Delaware court agreed with fresh submissions filed by Raveendran’s legal team. The court concluded that damages had not been properly determined in the original judgment and therefore reversed the damage award portion of the ruling. A new damages assessment phase is now scheduled for early January 2026, where both sides will present arguments on whether any liability exists.
Importantly, while the finding of default remains in place, the $1 billion judgement no longer stands as an enforceable award at this time.
Reactions From Byju’s Camp
Byju Raveendran’s legal advisors hailed the reversal as a crucial victory. Michael McNutt, Raveendran’s litigation advisor, emphasized that the founder is not currently liable to pay any damages under the amended court order. The team plans to demonstrate in the upcoming hearings that the plaintiffs—led by GLAS Trust and associated lenders—did not suffer any actual damages attributable to Raveendran’s actions.
Raveendran’s camp has also accused the plaintiffs of withholding or misrepresenting key information, claiming that this conduct misled both courts and the public. They contend that the controversial $533 million “Alpha Funds”—a central point of dispute—were properly accounted for and not misappropriated.
What Happens Next in the Legal Fight
With the reversal in place, the legal battle now enters a fresh phase:
- 📅 January 2026: The Delaware Bankruptcy Court’s new proceedings will begin to decide whether any damages should be assessed against Raveendran.
- ⚖️ Both sides will offer detailed written and possibly oral arguments about damage liability.
- 🚀 Raveendran is reportedly preparing to submit new evidence alleging that the original plaintiffs misled the courts in the US and India—a claim he may pursue in separate litigation.
This outcome provides a crucial reprieve for Byju’s founder, at a time when the company continues grappling with intense financial, legal, and operational challenges both in India and internationally.
Background: Byju’s and the $1B Lawsuit
Byju’s, formally known as Think & Learn Pvt Ltd, grew rapidly since its founding in 2011 to become India’s most valuable ed-tech startup. However, the company has faced mounting pressure from creditors, including allegations related to the handling of a large US term loan and the whereabouts of substantial loan proceeds.
The $1 billion judgment in November was seen as a severe escalation in these disputes, reflecting the deep legal and financial troubles confronting the once-booming startup. The recent reversal shifts the narrative, reigniting debates around the facts of the case and the integrity of the overall legal process.
What This Means for Byju’s Stakeholders
This court reversal offers temporary relief for Raveendran and Byju’s employees, investors, and students who rely on the company’s services. It also underscores the ongoing complexity of cross-border litigation involving large corporate and financial interests.
As January 2026 approaches, all eyes will be on the Delaware Bankruptcy Court to see how the damage assessment unfolds—and whether this chapter of the long-running legal saga ends in further setbacks or vindication for Byju’s founder.
