A US federal bankruptcy court has overturned a $1 billion damages order against Byju Raveendran, founder of edtech firm Byju’s, offering interim relief in the ongoing legal dispute with the company’s lenders. The ruling was issued by a Delaware bankruptcy court on December 8, 2025, according to a statement from Think and Learn Pvt Ltd, Byju’s parent company.

The reversal follows a default judgment passed last month that had directed Raveendran to pay over $1 billion, citing his alleged lack of cooperation in efforts to trace nearly half of a $1.2 billion term loan raised in 2021. Lenders led by GLAS Trust had accused Raveendran, co-founder Divya Gokulnath, and an associate of orchestrating the diversion of $533 million in loan proceeds.

Raveendran contested the judgment, arguing that the court did not grant him the 30 days he sought to appoint US legal counsel. Acting on a motion to correct its November 20 order, the court agreed that damages had not yet been determined and directed that sections assessing damages against Raveendran be removed.

The court has now asked both sides to submit their positions on damages by January 7, 2026, with a fresh phase of proceedings to begin thereafter. A final judgment will be issued only after the damages briefing is completed.

Byju’s founders have consistently denied the allegations, calling them baseless and stating that the funds were reinvested into Think and Learn to support its $3 billion acquisition programme. Raveendran is also weighing counterclaims of up to $2.5 billion against GLAS Trust, alleging misleading representations to courts in the US, India, and other jurisdictions. Further hearings are expected in early 2026.