Byju's Faces Legal Battle Over Alleged Fund Misuse in U.S. Bankruptcy Case

A software company led by Indian entrepreneur Byju Raveendran is accused of illegally diverting funds from its U.S. affiliates, violating bankruptcy regulations, according to a lawsuit filed in Delaware's federal court. Money intended for creditors was allegedly transferred to Whitehat Education Technology, as noted by the court-appointed trustee overseeing the affiliates, Claudia Springer. She is attempting to recover nearly $700,000 that was moved from the companies under her supervision.

This legal dispute is part of a larger conflict between Byju's and lenders who claim the company owes them over $1.2 billion.

For over a year, these creditors have been searching for $533 million they allege Byju’s concealed. Lenders have also placed a Byju's subsidiary, holding the missing funds, into Chapter 11 bankruptcy.

Meanwhile, Byju's is facing separate bankruptcy proceedings in India.

The lawsuit, involving Byju’s Alpha, a shell company used to access U.S. capital markets, is part of an ongoing attempt by creditors to recover the $533 million, which they assert belongs to them.

The court case continues in the U.S. Bankruptcy Court for the District of Delaware.