(Bloomberg) -- India’s top court struck down a bankruptcy tribunal’s order that allowed Byju’s to settle debts with a key creditor, pushing the online tutor back firmly into the insolvency process.

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The Supreme Court Wednesday ruled that the National Company Law Appellate Tribunal didn’t follow due legal procedure when it allowed a debt settlement between Byju’s and India’s cricket regulator. A lower level bankruptcy court will now take up the case again, which in effect means other lenders can pursue claims against Byju’s and seek redress through a creditor-nominated resolution professional or overseer.

The top court’s order is a defeat for founder Byju Raveendran and his eponymous firm, which is fighting for its life after being put into the insolvency process earlier in the year. It’s an immediate win for US-based creditor Glas Trust Company, which had opposed the settlement with the Indian creditor — the ruling body of India’s cricket — and is itself seeking funds from Byju’s.

The ruling “signifies a major setback for the ed-tech giant,” said Rohit Jain, a managing partner at Singhania & Co. “Creditors gain greater leverage, potentially accelerating asset recoveries, while Byju’s leadership will need to expedite settlements or risk liquidation.”

The order draws Byju’s near the end of a high-profile existence during which it reached a $22 billion valuation. Started in 2015, the online-tutoring service quickly gained fans and then saw its business surge during the Covid-19 pandemic, prompting Raveendran to expand abroad and making him a billionaire in the process. But as infections subsided and classrooms resumed, its cash pile shrank and the company ran into legal problems in the US as well as its domestic market.

The Supreme Court’s order means that the resolution professional — an overseer of the company when the founders and management are not in charge — will remain in control of the insolvency process. A panel of creditors, that’s also formed as part of the insolvency process, can scrutinize claims from other potential creditors, and later ask for bids for the company from potential buyers. Courts have to approve any such purchase. A company is liquidated if it doesn’t find a buyer.

While Byju’s may still emerge from insolvency, its operations have been severely disrupted. It has cut thousands of jobs and stopped accepting new students and offering new online courses. Raveendran this month said the company is valued at zero, and large investors including Prosus NV wrote off their investments in the firm earlier in the year.

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