Byju Raveendran, the founder of the troubled Indian edtech company Byju’s, is accused of attempting to use hidden loan proceeds to secretly repurchase a software company, according to a recent court filing in the United States.
The filing, submitted to the US Bankruptcy Court in Delaware, claims that Raveendran sought to reclaim his education technology empire, which is under legal scrutiny in both India and the US. Nebraska businessman William R. Hailer, who filed the declaration, stated that Raveendran enlisted him to buy out US creditors owed over $1.2 billion under a loan agreement. The alleged plan involved acquiring Epic!, a US-based education software firm, by leveraging the distressed loan, which was reportedly trading at just 24 cents on the dollar. However, the attempt was unsuccessful.
Allegations of Manipulation
Hailer, a former political consultant, claims he was used as a “pawn” in what he described as Raveendran’s manipulation of the legal process. He is expected to testify on behalf of a trustee tasked with selling Epic! to raise funds for Byju’s creditors. The trustee’s efforts aim to recover funds owed to US lenders.
Court documents reveal that Raveendran wired $11.25 million to Rose Lake Inc., a company controlled by Hailer. The funds were intended to demonstrate financial backing during negotiations with creditors, with the understanding that the money would be returned to Raveendran afterward. This money reportedly originated from OCI Ltd., a UK-based logistics firm that received a portion of the loan proceeds lenders are attempting to reclaim.
Dispute Over Loan Proceeds
Lenders allege that Raveendran concealed $533 million in loan proceeds that should have been used to repay creditors. Hailer’s filing notes that he tried to verify OCI Ltd.’s possession of the funds, but his efforts were unsuccessful. Despite Raveendran’s claims that all the funds had been spent, Hailer stated that he held regular discussions with Raveendran and other associates within Byju’s operations. These meetings included a visit to Raveendran’s family compound in Dubai, where discussions reportedly took place with potential investors backing Raveendran’s efforts to regain control of the company.
Legal Battles in India and the US
Byju’s is facing intense legal scrutiny on multiple fronts. In India, the company is undergoing insolvency proceedings, with a court-appointed professional working to raise funds to repay creditors. Meanwhile, in the US, lenders have pursued legal action in state and federal courts for over a year, accusing Raveendran of misconduct and withholding substantial funds.
Raveendran has previously denied allegations of wrongdoing, asserting that his actions were a justified response to aggressive tactics by creditors. Representatives for Byju’s and Raveendran have not responded to requests for comment on the latest allegations.
What has happened since: an update
The legal fights described above have moved on in several countries since this article was first published in November 2024. As of mid-2026, here is where things stood, based on court records and news reports:
- United States (Delaware): On November 20, 2025, a US bankruptcy court in Delaware issued a default judgment against Byju Raveendran in a case brought by Byju’s Alpha, the US unit at the centre of the $1.2 billion loan dispute, finding he had been evasive and awarding sums of about $533 million and $540.6 million on different counts, TechCrunch and others reported. Raveendran said he would appeal. In December 2025 the court amended that judgment, agreeing that damages had not yet been determined, and set a new damages phase for January 2026, according to Business Standard. His team said this meant he had not been found liable to pay any damages so far; that is his side’s description. A related case was still before the US District Court for Delaware in July 2026.
- Singapore: In May 2026, a Singapore court held Raveendran in contempt over earlier orders on disclosing assets and directed him to surrender to the authorities, according to reports. He said he planned to appeal.
- India: Think and Learn, the company behind Byju’s, remains in the insolvency process. The deadline for submitting resolution plans was extended to June 30, 2026. Raveendran has said settlement talks with lenders were at an advanced stage; any settlement would need approval from creditors holding at least 90% of the votes in the committee of creditors.
Raveendran has denied wrongdoing throughout and has said his actions were a response to what he called aggressive tactics by lenders. The lenders say money from the loan was hidden from them. These cases are still being decided, and none of the outcomes above should be read as final.
Why the Byju’s case matters
Byju’s was once India’s most valuable startup, valued at about $22 billion in 2022. Its fall has become a reference point for investors and founders on governance, the risks of fast growth funded by debt, and how cross-border loans are enforced. Read our startup glossary for simple explanations of terms like term loans, valuation and insolvency.
Questions to think about
- How should lenders and founders settle disputes when a company operates in several countries?
- What checks could investors use to spot problems in a fast-growing startup earlier?
- Should founders keep control of a company after it enters insolvency?
