The National Company Law Appellate Tribunal (NCLAT) has quashed insolvency proceedings against the edtech giant Byju's, potentially paving the way for a settlement with the Board of Control for Cricket in India (BCCI), as reported by Reuters.

This decision marks a significant victory for Byju's founder Byju Raveendran but poses a setback for US lenders who assert that the company owes them $1 billion.

Byju's, once valued at $22 billion in 2022, has faced numerous challenges, including boardroom departures, the resignation of its auditor, and a public dispute with foreign investors over allegations of mismanagement, which the company has denied.

The insolvency proceedings were initiated after BCCI claimed that Byju's failed to pay Rs 158 crore in sponsorship dues. The proceedings were halted after co-founder Riju Raveendran agreed to settle the dues by paying the amount himself.

The NCLAT stated, "The settlement between the parties is hereby approved and as a result thereof the appeal succeeds."

However, Glas Trust, representing some US lenders to a Byju's group company, opposed the cessation of the insolvency process, accusing the Raveendran brothers of using funds owed to lenders to pay off the cricket board.

In an August 1 court filing, Riju Raveendran asserted that he settled the cricket board's dues using "personal funds" and through the liquidation of personal assets.

Glas Trust retains the option to appeal the tribunal's decision to India's Supreme Court.