Byju’s, once the poster child of India’s edtech revolution, has seen its gleaming reputation crumble into a series of legal battles and controversies—an ironic lesson in how even the humble teacher can get it wrong sometimes.

On Wednesday, the Supreme Court raised eyebrows over Byju’s decision to settle a ₹158 crore debt owed to the Board of Control for Cricket in India (BCCI) while leaving a far larger ₹15,000 crore debt to other creditors, including US lender Glas Trust Co LLC, untouched.

A Bench led by Chief Justice DY Chandrachud asked, “Why did you choose to settle with BCCI only? What about the others? When the debt is as large as ₹15,000 crore, can one creditor simply walk away because a promoter is ready to pay? Out of personal assets? You have today a debt of ₹15,000 crore,” he remarked.

The Supreme Court was hearing appeals from Glas Trust, which represents lenders owed $1.2 billion. Glas Trust challenged the settlement between Byju’s and BCCI, alleging that the funds used to pay the BCCI—provided by Byju Raveendran’s brother, Riju Ravindran—were questionable.

Last month, the court had stayed an order from the National Company Law Appellate Tribunal (NCLAT) that approved the ₹158.9 crore settlement between Byju’s parent company, Think & Learn Pvt Ltd, and BCCI.

The apex court didn’t hold back on Wednesday, also questioning NCLAT’s hasty decision to overturn a July 16 order that initiated insolvency proceedings against Think & Learn.

“Look at the reasoning in the NCLAT order—just one paragraph. There’s no application of mind at all… Let the tribunal rethink and figure out where the money is coming from,” the Chief Justice said.

Representing the BCCI, Solicitor General Tushar Mehta urged the court to let NCLAT’s ruling stand, warning of serious consequences if Glas Trust’s appeal succeeded.

Senior counsel Shyam Divan, representing Glas Trust, argued that NCLAT wrongfully approved the settlement based on a vague promise from Riju Ravindran, despite concerns about the questionable source of the funds.

In defense, Byju’s senior counsel AM Singhvi and NK Kaul refuted claims that Byju and his brother Riju were absconding.

“So many perjury statements! They claim we’re absconding, but my brother and I visited India 12 times… This is just a large corporate entity flexing its muscles,” Singhvi remarked sarcastically.

Kaul added, “I was here the last time too… How can they call me absconding? There was no payment default. Glas Trust keeps changing its story. Sometimes they allege round-tripping, other times they say it’s Riju Ravindran’s personal funds. Ultimately, they must prove these claims.”

The Supreme Court will continue hearing the case on Tuesday.

Byju’s Many Problems

First off, the company recently faced a massive lawsuit from lenders in the U.S. This was over an alleged loan default amounting to $1.2 billion.

Yes, the very same company that taught students how to manage numbers is now seemingly having a little trouble managing its own. To add insult to injury, Byju’s decided not to make its quarterly interest payment on the loan, leading to a nasty courtroom tango with creditors.

The company then decided to sue these lenders, claiming they were “predatory” and “riding roughshod” over their rights—because Byju’s was so quick to flip the script!

Adding more fuel to the fire, Byju’s has also been embroiled in a scandal over its accounting practices.

The company delayed filing its financial reports for 2021 by more than a year, which is a great way to make everyone wonder what’s happening behind the scenes. When the numbers finally did appear, the company showed a staggering loss of ₹4,588 crores, while still valuing itself at $22 billion.

Byju’s has also been accused of aggressive and borderline unethical sales tactics. Many parents claimed they were misled into signing up for expensive courses they didn’t need and were strong-armed into loans to pay for them.

This pushy sales culture gave the company a black eye, especially since they were allegedly targeting lower-income families—the same demographic they claimed to be empowering.

At the same time, Byju’s went on a flashy acquisition spree. Byju’s spent billions on companies like Aakash Educational Services, Great Learning, and WhiteHat Jr. The latter drew significant criticism after it promised to turn kids into coding prodigies.

Yet, WhiteHat Jr. faced backlash for allegedly fudging claims and resorting to bizarre advertisements that showed kids launching apps in a week, which experts kindly described as “ridiculous.”

The cherry on this controversy-laden no so sweet cake?

Employees have come out with complaints about a toxic work culture, long hours, and mounting pressure to meet impossible targets. To top it all the company has undergone many rounds of layoffs even as salaries have not been paid, delayed along with non-payment of EPF etc.

At this point, Byju’s doesn’t just need better financial advisors; they might need a life coach.

Byju’s Faces Setback As US Court Upholds $1.2 Billion Loan Default Ruling

On September 23, the Delaware Supreme Court delivered a significant blow to Byju’s by upholding a previous ruling that declared the Indian edtech giant in default on its $1.2 billion Term Loan B.

This decision thus reinforces the challenges Byju’s has been struggling with in recent months.

The court’s ruling supports an earlier judgment from the Delaware Court of Chancery, which allowed Byju’s lenders, represented by Glas Trust LLC, to take control of Byju’s Alpha Inc., a key American subsidiary that had been pledged as collateral for the loan.

The $1.2 billion loan had originally been extended by a consortium of 37 financial institutions. As per the loan agreement, Glas Trust, acting on behalf of the lenders, had the right to enforce their claims if Byju’s defaulted on its obligations.

In March 2023, after Byju’s failed to renegotiate the loan terms, the lenders issued a notice of default and following the default, Glas Trust moved to seize control of Byju’s Alpha Inc., a subsidiary that was essential in securing the loan.

In August 2023, the Delaware Court of Chancery ruled in favour of Glas Trust, determining that Byju’s had failed to meet its obligations under the loan agreement, and that the lenders were entitled to take control of Byju’s Alpha Inc.

Byju’s Appeal Rejected

Byju’s attempted to overturn the ruling by appealing to the Delaware Supreme Court, arguing that the case should be put on hold due to a separate lawsuit pending in a New York court.

However, the Supreme Court rejected this argument, stating that Byju’s had forfeited its right to raise the issue by not addressing it earlier.

The Delaware Supreme Court noted that Byju’s had multiple opportunities to raise concerns during the proceedings in the Court of Chancery, but the company failed to do so.

The court stated, “We find it difficult to see how judicial economy and finality can square with requiring the parties to retry the case, merely because the Appellants failed to address an issue which they now claim is vital to this case.”

As a result, control of Byju’s Alpha Inc. will remain with Glas Trust and the group of lenders. This subsidiary, a major asset for Byju’s, had been put up as collateral for the loan. The lenders welcomed the ruling, which strengthened their position on Byju’s default.

“We are pleased that the Delaware Supreme Court affirmed what we’ve known: Byju’s knowingly breached the credit agreement and defaulted,” the lenders said in a statement.

They also pointed out that Byju’s co-founder, Byju Raveendran, and board member, Riju Raveendran, had acknowledged the default when they signed amendments to the loan agreement between October 2022 and January 2023.

The ruling also confirmed the lenders’ right to accelerate the loan and take control of Byju’s Alpha Inc.

The Result So Far

As of now, the lawsuit in the U.S. remains unresolved.

The case is still being litigated, with Glas Trust pushing for a court-ordered restructuring of Byju’s finances, potentially leading to asset sales or even a forced liquidation of some parts of the business.

Byju’s, on the other hand, continues to maintain that it is being targeted unfairly by creditors who are trying to squeeze the company during its time of financial stress.

The court has not yet made a final ruling, but the stay on insolvency proceedings back in India, as well as the Supreme Court’s intervention, suggests that this case has far-reaching implications.

If the U.S. creditors succeed, Byju’s may be forced into more stringent debt repayment plans, possibly leading to asset divestitures or other drastic measures to satisfy its creditors.

Hence, Byju’s finds itself in a precarious position—caught between legal battles in the U.S., scrutiny from Indian courts, and rising public skepticism over its handling of funds.

The final outcome of this lawsuit will likely have significant ramifications for Byju’s future and its ability to regain trust among both investors and the general public.

Byju’s seems to be learning the hard way that rapid growth without checks, balances, or a clear moral compass can spiral out of control—because no matter how good the teacher, sometimes the lesson plan just goes wrong.