Byju’s $2.5Bn Lawsuit Targets Glas Trust, Investors Over Startup Dispute

The founders of edtech company Byju’s have filed a $2.5 billion lawsuit against a group of investors and lenders, Business Standard reported. The case includes allegations of breach of trust during a prolonged control dispute. The legal filing also reflects growing tensions between Indian startups and foreign investors amid rising governance concerns.

Once valued at over $22 billion, Byju’s has seen its reputation and market standing erode rapidly due to missed loan repayments, mass layoffs, and ongoing regulatory scrutiny. The legal battle adds another layer of complexity to the company’s efforts to restructure and regain investor trust.

A Legal Push from Byju’s Founders

Byju’s $2.5 billion lawsuit accuses several parties, including Glas Trust and a group of term loan B lenders. The planned lawsuits are aimed at parties the founders believe played a role in the downfall of Think & Learn, the parent company of Byju’s, amid a long-running battle over control of the startup. Some legal claims have already been filed in Indian courts against Glas Trust, a former subsidiary now trying to take control of parts of the business.

J Michael McNutt, senior litigation advisor, Lazareff Le Bars Eurl, said, “Byju’s founders reserve all rights to bring actions against those parties that have caused damage to them personally and to their businesses, including Think & Learn. The claims to be issued by all or some of Byju’s founders are expected to request monetary damages of not less than $2.5 billion.”

Focus on the Glas Trust and Bankruptcy Dispute

At the center of its case is Glas Trust, a US-based entity that served as the administrative agent for the $1.2 billion term loan Byju’s raised in 2021. Byju’s claims that Glas and the consortium of lenders deliberately forced its US subsidiary into Chapter 11 bankruptcy, creating the impression that the entire company was on the brink of collapse.

The founders are framing the $2.5 billion suit against Glas Trust as an effort to expose what they describe as a coordinated campaign to discredit the company’s leadership, hurt its global reputation, and gain control of its key assets.

The court documents allege that Glas and the lenders imposed harsh loan terms and took steps to manipulate the financial condition of Alpha Inc. Byju’s is asking the court to award damages and nullify actions taken by the lenders regarding its bankrupt subsidiary.

Company’s Stand and the Broader Crisis

Byju’s lawsuit against investors is part of a broader defense strategy by the Raveendran-led management, which has been under intense scrutiny for financial mismanagement, delayed audit reports, mass layoffs, and investor disputes.

Despite being one of India’s most valuable startups at its peak, Byju’s has seen its valuation plummet and faces multiple legal and financial challenges. The company is now trying to regain control over its international business units and reestablish investor trust.

Byju’s Raveendran has publicly stated that the lawsuit is meant to protect the company from what he calls “hostile corporate actions” by opportunistic stakeholders. The case is now in the early stages, and it may take months before any resolution is reached. However, the move signals that Byju’s leadership is preparing for a prolonged battle as it tries to recover from one of the most dramatic downturns in India’s startup history.