BENGALURU: Byju Raveendran and Divya Gokulnath, the high-profile founders of edtech giant Byju’s, are preparing to file a massive ₹20,940 crore ($2.5 billion) lawsuit against Glas Trust and select lenders, citing substantial reputational and financial damages. The legal action marks a significant escalation in the ongoing insolvency and credit dispute that has embroiled Byju’s since early 2024.
The lawsuit will be lodged in multiple jurisdictions, including India and international forums. In a scathing statement, legal counsel for the founders said the actions of Glas Trust and others were “reprehensible and improper,” causing severe harm to the company’s operations and the personal standing of the founders.
Backstory: Shockwaves from ₹10,032 crore ($1.2 billion) Debt Fallout
The lawsuit stems from a bitter showdown triggered by a ₹10,032 crore ($1.2 billion) loan extended to Byju’s U.S. division, Byju’s Alpha Inc., managed by Glas Trust on behalf of lenders. Glas Trust has counter-sued, alleging the founders orchestrated a scheme to misappropriate ₹4,455 crore ($533 million) from the loan proceeds, claims which the founders deny categorically.
Further complicating matters, on July 7, a U.S. court held Byju Raveendran in civil contempt for withholding documents requested during bankruptcy proceedings. The founders have challenged the court’s jurisdiction, asserting that overlapping legal issues are being addressed in Indian tribunals.
What Lies Ahead: Legal Cross-Fire and Reputational Fallout
Lawyers representing the founders emphasised that legal actions are underway in India against Glas Trust and are planning coordinated filings in overseas courts. They intend to pursue not less than ₹20,940 crore ($2.5 billion) in damages in “all jurisdictions” where Glas Trust has filed claims.
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Simultaneously, Byju’s is challenging the status of Glas Trust as a financial creditor before the National Company Law Tribunal and disputing the insolvency process under the Insolvency & Bankruptcy Code.
This confrontation, the crash of a ₹1,83,920 crore ($22 billion) valuation, mounting debt, and cross-border legal battles, signals a dramatic escalation in India’s high-stakes startup wars. The confrontational nature of Byju’s strategy could potentially reshape corporate governance norms and creditor-lender relationships in large private enterprises.