A judge has dismissed a state lawsuit to take control of The David School in Floyd County, saying a new board is providing proper oversight.
Circuit Judge Johnny Ray Harris also barred Daniel Greene from having any contact with the school.
Greene helped found the school in the 1970s to provide an alternative for students at risk of dropping out of high school.
The Kentucky Attorney General's Office said in a lawsuit that Greene, who had control of the school's finances, might have misappropriated assets.
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The lawsuit also said the school might be in danger of going broke.
The lawsuit was styled as a complaint to liquidate the school, though the goal was to take control and install new directors to try to revitalize the school.
Monday, Harris gave full terms to five new board members named earlier and dismissed the lawsuit to liquidate the school.