Byju’s, the well-known Indian tech company led by Byju Raveendran, is facing serious legal trouble in the U.S. A lawsuit has been filed in a Delaware federal court, accusing the company of illegally moving funds from its U.S. affiliate. The lawsuit claims that money meant to pay off creditors was instead sent to another company, Whitehat Education Technology.
A court-appointed trustee, Claudia Springer, who is also a bankruptcy lawyer, is asking for the return of about $700,000 that was allegedly transferred from accounts she oversees. This situation is part of a larger issue between Byju’s and its lenders, who say the company owes them more than $1.2 billion.
For more than a year, lenders have been trying to track down $533 million that they claim Byju’s has hidden from them. This dispute comes from a Byju’s U.S. affiliate, which once held the missing $533 million. Creditors took control of the affiliate and put it under Chapter 11 bankruptcy. Three other Byju’s units were also forced into bankruptcy and are now being managed by Springer. All of these U.S.-based affiliates are in bankruptcy court in Wilmington, Delaware, while Byju’s is also dealing with bankruptcy proceedings in India.
In U.S. bankruptcy cases, moving or using funds usually needs court approval, especially in the early stages. However, Byju’s is being accused of moving the $533 million in violation of these rules. According to the lawsuit, money from the affiliate’s Stripe account was sent to a Wells Fargo account linked to Whitehat between September 26 and October 7. The lawsuit also claims that people with Byju’s email addresses in India tried to access the U.S. affiliate’s accounts.
Springer is asking the court to stop Wells Fargo from allowing any more transfers from Whitehat’s account. So far, neither Stripe nor Wells Fargo have commented on the matter.
Byju’s is also facing another lawsuit about the $533 million connected to a shell company called Byju’s Alpha. This shell company was created to access U.S. capital markets, and after Byju’s defaulted, lenders took control of it. They are now suing to recover the funds they believe belong to them.
