Battery maker Northvolt files for Chapter 11

BY Fraser Tennant

Despite exhaustive efforts to secure a viable financial and operational future, Swedish battery maker Northvolt has filed for Chapter 11 bankruptcy in Sweden.

The company, like many in the battery sector, has experienced a series of challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions and shifts in market demand.

Northvolt has also faced significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen.

The company sought Chapter 11 bankruptcy protection in the US in November 2024, but despite liquidity support from its lenders and key counterparties, it was unable to secure the necessary financial conditions to continue in its current form.

As a result, the board of directors at Northvolt determined that Chapter 11 bankruptcy in Sweden was the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process.

“This is a difficult time for everyone at Northvolt,” said Tom Johnstone, interim chairman of the board at Northvolt. “We set out to build something groundbreaking – to drive real change in the battery, electric vehicle and wider European industry and accelerate the transition to a green and sustainable future.”

This future includes the improvement and upwards trajectory of Northvolt's production in Skellefteå, where cell output from serial production lines has doubled and the company has secured a 50 percent improvement in production yield since September 2024.   

“Northvolt has come a long way, and we are beginning to see the real outcomes of our work, including production line improvements that helped customers bring more electric vehicles to the market more quickly,” continued Mr Johnstone. “It remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry. It needs patience and long-term commitment from all stakeholders.”

The company is hopeful that the outreach it has undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process.

Mr Johnstone concluded: “We are hopeful that the foundation we built – the technology, the expertise and the commitment to sustainability – will continue to drive change in the industry.”

News: Swedish battery maker Northvolt files for bankruptcy

Liberated Brands files for Chapter 11 protection

BY Richard Summerfield

Liberated Brands, the former operator of licences for Quiksilver, Volcom and Billabong, has filed for Chapter 11 bankruptcy protection in a Delaware court. According to the company’s filing, it intends to wind down its North American operations.

Set up to manage Authentic Brands Group’s collection of action sports lifestyle brands, Liberated was founded by ex-Volcom executives in 2019. It underwent a massive expansion after the COVID-19 retail boom, going from operating 67 stores to 140 in short order. The expansion also saw the company nearly triple its staff and take over the retail and e-commerce operations for Billabong, Quiksilver, RVCA and more. However, it struggled since this expansion, and in December 2024, Authentic decided to pull all the licences from Liberated globally, believing it did not have the resources to adequately invest in them.

According to Liberated’s Chapter 11 filing, its estimated assets and liabilities ranged from $100m to $500m. The company has $3.3m in cash on hand and $226m in debt. The list of Liberated’s largest unsecured creditors included a range of overseas clothing manufacturers. Liberated owes its single biggest unsecured creditor, Ningbo Jehson Textiles in China, $3.2m. Additional large unsecured creditors include other companies that license former Boardriders brands, including the 05 Group, which Liberated owes about $1m, and Centric Brands, which has the licence to make children’s apparel for several former Boardriders brands. Liberated owes Centric approximately $750,000.

Liberated has received interim approval to access $25m of its $35m debtor-in-possession financing from its secured lender JPMorgan Chase Bank NA. The move is seen as interim measure to get the company to its next hearing on 4 March 2025.

“The Liberated team has worked tirelessly over the last year to propel these iconic brands forward, but a volatile global economy, consumer spending changes amid a rising cost of living, and inflationary pressures have all taken a heavy toll,” said Liberated Brands in a statement. “Despite this difficult change, we are encouraged that many of our talented associates have found new opportunities with other license holders that will carry these great brands into the future.”

The brands which Liberated licensed from Authentic will not be impacted by the Chapter 11 filing. According to a statement, the brands have already transitioned to new, well-capitalised partners. The company currently has more than 100 locations in the US, all of which will close once a liquidation sale process has been completed. The fate of the company’s nine stores in Hawaii has not yet been determined. The company said it is looking for a buyer of its Australian, European, Japanese and Canadian business units, which are also unaffected by the filing.

News: Liberated Brands Files for Chapter 11 Bankruptcy

The Container Store exits Chapter 11

BY Fraser Tennant

Weeks after filing for Chapter 11 bankruptcy protection, US speciality retail chain The Container Store Group has successfully completed its financial restructuring process and emerged as a private company.

The company achieved the objectives it set for the bankruptcy and restructuring processes, including refinancing short-term debt, significantly reducing previous long-term debt obligations, accessing $40m in new financing, and modifying its asset-backed lending facility to add $40m in upsized capacity.

In addition, the company has continued to operate as usual, meeting its obligations to vendors, employees and customers throughout the bankruptcy process, and is now under the ownership of its supportive lenders, with a healthier balance sheet that positions the company for profitable growth.

The Texas-based company filed for Chapter 11 bankruptcy in December 2024 citing mounting debt and quarterly losses. According to court documents, the company was $243m in debt while having approximately $11.8m cash in hand.

The Container Store is among a number of retailers that have fallen into bankruptcy, including Party City and Joann, which filed its second bankruptcy earlier this week. Big Lots has also announced plans to close entirely.

“This is a new chapter in our journey as a healthier company well positioned to drive strategic growth initiatives forward,” said Satish Malhotra, chief executive and president of The Container Store. “With our restructuring process now behind us, we have renewed energy and excitement to deliver for our customers.

Founded in 1978, The Container Store is the only retailer in the US with a solution-oriented offering of custom spaces, organising solutions, and in-home services, designed to transform lives through the power of organisation.

With more than 100 locations nationwide and a flagship online store, the retailer offers an exclusive portfolio of custom space lines that can be designed for any area of the home, and more than 10,000 products to complete any space.

“We are focused on optimising our business, enhancing our portfolio of organising solutions and services, and continuously improving the customer experience,” concluded Mr Malhotra. “I am grateful to our employees and vendor partners for their dedication throughout this process, to our valued customers for their support, and to our new owners for their belief in our business.”

News: The Container Store emerges from Chapter 11 bankruptcy

Mondee files for Chapter 11 in pursuit of long-term growth

BY Fraser Tennant

In a move designed to position the company for long-term growth, air ticket consolidator Mondee Holdings has filed for Chapter 11 bankruptcy in order to facilitate a series of transactions contemplated under a restructuring support agreement (RSA).  

The transactions include a term sheet to sell substantially all of the assets of Mondee to a newly formed entity owned by, among others, affiliates of TCW Asset Management Company LLC and Wingspire Capital LLC.

Should the TCW bid be the successful one, following the closing of the sale, Prasad Gundumogula, co-founder, chairman of the board and previously chief executive, will have a 75 percent equity stake in, and serve as chief executive of, the newly formed entity.

While Mondee pursues a sale of the company to the current bidder or another party with a higher or better offer, its existing secured lenders will continue to provide support throughout the Chapter 11 proceeding by committing to an additional $27.5m financing for operating capital, in addition to the $21.5m of financing recently made available.

Throughout the court-supervised process, Mondee will operate its business as usual and will continue to support its customers and partners without disruption. The Chapter 11 proceedings do not impact Mondee entities in Brazil, Mexico, India and Canada.

“Today’s announcement marks an important step forward for Mondee, our valued customers, partners and our dedicated team as we continue to transform our business for the future,” said Jesus Portillo, chief executive of Mondee. “With a sustainable capital structure and a structured sales process, we will be well-equipped to enhance our leadership in the travel market.”

Additionally, Mondee is in the process of filing first day motions with the bankruptcy court. The relief requested will ensure a smooth transition into Chapter 11 and the ability to maintain normal operations, including Mondee’s commitments to customers and partners and the payment of employee wages and benefits.

Established in 2011 and operating 21 offices globally, Mondee drives change in the leisure and corporate travel sectors through its broad array of innovative solutions. Available both as an app and through the web, the company’s platform processes over 50 million daily searches and generates a substantial transactional volume annually.

Mondee is looking to move expeditiously through the bankruptcy process and emerge from Chapter 11 in the beginning of the second quarter of 2025.

Mr Portillo concluded: “We have taken decisive action to overcome past challenges and are encouraged by employee engagement, organisational culture, and our ability to deliver best-in-class products and services.”

News: Mondee files for bankruptcy in the US

Ligado Network files for Chapter 11 bankruptcy protection

BY Richard Summerfield

US satellite communications company Ligado Networks has filed for Chapter 11 restructuring in the US state of Delaware.

According to the company’s filing, Ligado Networks has assets and liabilities of between $1bn and $10bn. Inmarsat Global Limited and Boeing Satellite Systems are listed as the two largest unsecured creditors, though the amounts they are owed have not been disclosed.

The filing will allow Ligado to continue operations as it implements a plan to repay creditors. Ligado has also signed a deal with AST SpaceMobile to allow the company to use Ligado’s mid-band spectrum.

As part of its restructuring support agreement, Ligado stated that a significant portion of its supporting creditors hold approximately 88 percent of its funded indebtedness. The supporting creditors have agreed to provide a fully backstopped financing commitment to provide $115m of additional incremental financing to fund the company during the restructuring process. Upon completion of Ligado’s Chapter 11 filing, the company’s debt will be reduced from $8.6bn to approximately $1.2bn. To that end, the restructuring will see the conversion of approximately $7.8bn of existing debt into new preferred equity and the preservation of the existing interests in the capital structure below the new preferred equity.

Ligado will continue to operate through the restructuring, providing mobile satellite services to its existing customers and advancing its mobile satellite plans to emerge from Chapter 11 on firm footing.

“This restructuring allows us to concentrate on our ongoing value-maximizing daily work and other key initiatives for the benefit of all of our stakeholders,” said Doug Smith, president and chief executive of Ligado.

The filing follows a year-long effort to secure a comprehensive resolution with satellite communications company Viasat to restructure Ligado’s significant payment obligations to Inmarsat, which Viasat acquired in 2023.

According to a statement from Ligado, the company’s filing was precipitated by large operational losses Ligado suffered due to what it considers the US government’s unlawful taking without just compensation of Ligado’s licensed spectrum. In response, Ligado Networks filed a lawsuit against the US government in October 2023, alleging it took some of its Federal Communications Commission-licensed spectrum for use by the Department of Defence without compensation, which the company alleges prevents it from launching its own 5G operations. In November 2024, a federal judge ruled Ligado Networks could continue its lawsuit after the US government sought to dismiss it.

“Ligado will continue to vigorously prosecute its litigation against the US government to enforce its constitutional right to just compensation for the government’s unlawful taking of Ligado’s licensed L-Band spectrum,” said Mr Smith. “The DOD’s actions constitute the largest uncompensated taking of private property in the US in modern times and have caused Ligado catastrophic financial distress.”

News: Ligado Files for Chapter 11, Makes Deal with AST SpaceMobile for MSS Spectrum