Repeated violation of court orders, evasion, obstruction: US court orders Byju Raveendran to pay $1 Billion

The United States Bankruptcy Court for the District of Delaware has ordered Byju’s founder Byju Raveendran to pay more than $1.07 billion after finding that he repeatedly violated discovery orders, evaded court directives, and obstructed efforts to trace the missing $533 million “Alpha Funds [Byju's Alpha Vs Byju Raveendran]..The billion-dollar liability stemmed not from a trial on the merits, but from the Court’s conclusion that Raveendran willfully refused to comply with orders requiring him to disclose information about the missing $533 million “Alpha Funds” and the subsequent transfer of the Camshaft Capital Fund partnership interest valued at $540.6 million. As a result, the judge imposed the ultimate procedural sanction available under US civil procedure.Crucially, the order applies only to Raveendran. Co-defendants Divya Gokulnath and Anita Kishore were not sanctioned and face no default judgment..The adversary proceeding was part of BYJU’s Alpha ongoing efforts to unravel a series of fraudulent transfers that stripped it of its assets (including the $533 million Alpha Funds by placing those assets beyond the reach of Byju's Alpha and its creditors and concealing their whereabouts. Byju's Alpha commenced the adversary proceeding against defendants Byju Raveendran, Divya Gokulnath and Anita Kishore on April 9, 2025, asserting claims for breach of fiduciary duties, aiding and abetting breach of fiduciary duties, accounting, conversion and civil conspiracy..The default judgment was issued under Rule 37(b)(2)(A)(vi) after months in which the Court said Raveendran treated binding discovery orders as optional.The judge found that even after multiple extensions, Raveendran’s responses were evasive and incomplete and not even remotely satisfactory or consistent with what the Court would expect a legitimate and good faith document production would be.He failed to appear for hearings, ignored deadlines, provided four documents that were all public and irrelevant, and refused to produce financial or transactional records necessary to trace more than half a billion dollars. His conduct, the Court said, was not neglect but deliberate."The facts and circumstances of this case indicate that Raveendran’s continuing failure to adequately respond to the pending discovery requests is a personal decision by Raveendran, himself," the judge ruled..In July 2025, the Court entered a civil-contempt order requiring Raveendran to pay $10,000 per day until he complied. By November, he had paid nothing, allowing “hundreds of thousands of dollars” in sanctions to accrue.The judge noted:“The monetary sanctions, however, remain unpaid and have been ineffective. Raveendran lives abroad and apparently has no intention of satisfying his financial penalties or complying with the discovery orders. Accordingly, the monetary sanctions have not provided an effective remedy, making a harsher sanction such as default judgment appropriate in this instance.” The Court pointed out that Raveendran lives abroad and apparently has no intention of complying thus leaving the Court with no realistic alternative..The urgency was linked to the history of the Alpha Funds and the Camshaft LP interest.The Court stressed that well over a half-billion dollars has been spirited away from the debtor.Because defendants had both incentive and capacity to hide their assets, expedited discovery was justified, the judge said..The Court fixed damages at:$533,000,000 — aiding and abetting breach of fiduciary duty;$540,647,109.29 — breach of fiduciary duty, conversion, civil conspiracy.Thus, a total $1,073,647,109.29 was imposed.These amounts correspond to the cash transferred to Camshaft Capital and the value of the Camshaft LP interest that was later moved for no consideration. The Court found the documentary evidence clear and noted that Raveendran’s obstruction left him unable to challenge the calculation.."The Court acknowledges that the relief granted herein is extraordinary. But the circumstances of this case are, frankly, unique and unlike anything the undersigned has encountered before, thereby making such relief in this case richly warranted," the judgment said..[Read Judgment].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.