Byju’s Alpha: Court rules $533 million loan funds can’t be used, moved

By Sarah Lizee

Olympia, Wash., March 15 – A steering committee of term loan lenders for Byju's Alpha, Inc.’s $1.2 billion term loan announced Friday that judge John T. Dorsey of the U.S. Bankruptcy Court for the District of Delaware issued an order granting a preliminary injunction in favor of the debtor against Riju Ravindran, Inspilearn LLC and Camshaft Capital Fund, LP and its affiliates.

The court also found that Byju Raveendran and Divya Gokulnath are working in concert with the defendants and ordered them to comply with the ruling.

Through the order, Byju Raveendran, Gokulnath and the defendants are prohibited from further transferring or using any of the $533 million in loan proceeds previously held by Camshaft and subsequently transferred to an unnamed, unknown offshore trust.

“The fact that the parent company is attempting to hide where the assets are is huge,” Dorsey commented at a hearing.

“It shows that they are engaged in what appears to be a potential fraud.”

The judge said Ravindran was either being untruthful or he's the “most incompetent officer or director of a company in Delaware history.”

Notably, the court also ordered the arrest of William Morton, the founder of Camshaft, following his repeated refusal to appear in court and provide any of the requested information regarding the transfers of the $533 million in loan proceeds and the current status and location of the funds.

Morton was also ordered to pay a fine of $10,000 per day until he complies with the court’s order.

“The significance of the court’s ruling for all aggrieved parties owed money by Byju’s cannot be overstated,” the lender group said in the release.

“This ruling confirms that Byju Raveendran himself is acting in concert with, among others, his brother, Riju, his wife, Divya, and fugitive William Morton, and that these individuals are continuing to intentionally defraud Byju’s lenders.

“The court-ordered freezing of assets is an important step towards recovering the missing $533 million, and we will take all necessary legal actions to recover what we are rightfully owed.”

Byju’s is an India-based educational technology company. The Byju’s Alpha unit is located in Lewes, Del. It filed bankruptcy on Feb. 1 under Chapter 11 case number 24-10140.

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