A US bankruptcy court has ordered Byju’s founder Byju Raveendran to pay more than $1.07 billion, after entering a default judgment that holds him personally liable for the movement and concealment of funds from Byju's Alpha, the company's US financing arm. The order was issued on November 20 by judge Brendan Shannon of the Delaware Bankruptcy Court, after Raveendran repeatedly failed to comply with directions to appear and provide documents.
What is Byju’s Alpha and how is it linked to the case?
Byju’s Alpha was incorporated in Delaware in 2021 as a special-purpose vehicle created to raise and manage the company’s $1.2 billion term loan from a consortium of global lenders. The subsidiary had no operating business and functioned primarily as a holding entity for the loan proceeds. Court filings show that it became the central entity through which the disputed $533 million transfer was executed.
What is Camshaft Capital and why was $533 million sent to it?
The judgment centres on the transfer of $533 million from Byju's Alpha to Camshaft Capital, a small Miami-based hedge fund. The transfer was followed by further movements of the investment interest through affiliated entities tied to Byju's, and the court held Raveendran personally responsible for directing these steps.
The court awarded $533 million on the claim that he aided and abetted a breach of fiduciary duty, and an additional $540.6 million on claims of breach of fiduciary duty, conversion and civil conspiracy, bringing his total liability to more than $1.07 billion. Judge Shannon wrote that the relief was 'extraordinary', but justified given the conduct on record.
What else has the court ordered?
The court has directed Raveendran to produce a full accounting of the Alpha Funds, including the original $533 million transferred to Camshaft Capital, the limited-partnership interest created through that investment, every transfer that followed, and any proceeds that remain. The judge said this was necessary because the money has not been traced despite multiple earlier orders.
How did the transfers become central to the dispute?
Earlier proceedings stated that the $533 million transfer to Camshaft Capital was followed by a further transfer of the investment interest to an affiliated entity called Inspilearn and later to an offshore trust, without any consideration returning to Byju's Alpha. The bankruptcy estate argued that these steps removed the US subsidiary’s sole significant asset while lenders were attempting to enforce rights under the $1.2 billion loan.
Does this mean Byju Raveendran has to immediately pay $1 billion?
Although the court has ruled that Raveendran personally owes more than $1 billion, the amount is not payable immediately. Creditors must now initiate enforcement actions in jurisdictions where he holds assets and seek recognition of the Delaware judgment through local courts. The ruling remains binding unless overturned on appeal or modified in subsequent proceedings.
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