Akoustis Technologies files for Chapter 11 protection

BY Fraser Tennant

In a move it hopes will allow it to emerge as a cleaner and more robust entity, radio frequency (RF) products manufacturer Akoustis Technologies (AKTS) has filed for Chapter 11 bankruptcy protection.  

The voluntary Chapter 11 filing follows Akoustis’ recent legal case with Qorvo, Inc., in which Akoustis was ordered to pay a total judgement of approximately $59m in damages, fees and interest related to allegations of trade secret misappropriation and patent infringement.

To support the sale process, Akoustis has entered into a stalking horse asset purchase agreement with Gordon Brothers Commercial & Industrial, LLC for certain assets of the company.

Prior to the commencement of the Chapter 11 cases, Akoustis engaged in discussions with interested parties about the company's future operations through a potential sale of its businesses and assets. The company intends to use the court-supervised sale process to seek the highest or best bid for its assets.

To ensure the continued operation of its business without interruption, Akoustis has filed customary ‘first day’ motions in its Chapter 11 cases. These motions, upon approval, will help facilitate the continued payment of employee wages and benefits, enable payments to critical vendors and other relief measures standard in these circumstances.

“In light of the final judgement, we have taken this strategic step to provide flexibility and allow us to continue operations while our sale process continues with momentum,” said Kamran Cheema, chief executive of Akoustis. “Our priority is to ensure a seamless process for our customers, partners and employees as we work to find partners who recognise the importance of our products, continued operations and the central role we play in the RF wireless industry.”

Founded in 2014 and headquartered in Charlotte, North Carolina, Akoustis is a bulk acoustic wave RF company that targets high-power, high-frequency and ultra-wideband solutions for Wi-Fi AP, 5G infrastructure and mobile, automotive, defence and other markets.

Mr Cheema concluded: “We intend to leverage the court-supervised sale process to reaffirm that the business being sold is free and clear of any Qorvo infringement following the court-ordered cleansing process, which we firmly believe is the case.”

News: Akoustis Technologies Files For Chapter 11 Bankruptcy

Trucking company Kal Freight files for Chapter 11

BY Fraser Tennant

In one of the sector’s biggest bankruptcies of 2024, trucking company Kal Freight has filed for Chapter 11 bankruptcy protection in order to wind down failing affiliates and restructure its primary business.

Bankruptcy court documents show that the company owes approximately $325m to creditors, including Daimler, TBK Bank and Bank of America.

High demand during the pandemic saw Kal Freight invest heavily in trucks and trailers, but once the crisis subsided, the company was overleveraged and unable to meet its financial obligations.

Kal Freight is one of a number of major trucking companies to have filed for bankruptcy protection in 2024. These include Miami-based Star Transportation, Illinois shipping company Mighty Move Transportation and Texas-based logistics company Sunset Logistics.

Kal Freight intends to fund the Chapter 11 process with debtor-in-possession financing, which will provide it with the necessary liquidity to maintain normal operations while it undertakes certain key operational restructuring initiatives to emerge as a stronger enterprise positioned for long-term success.

Kal Freight has appointed Bradley D. Sharp, president and chief executive of Development Specialists, Inc., to serve as chief restructuring officer during the Chapter 11 process.

Kal Freight plans to “reorganise around their core trucking business and to wind down their non-core parts and tires businesses and liquidate certain real estate assets”, said Mr Sharp in the court filing. “The company intends to continue paying its employees in full in the ordinary course, as well as paying its vendors and suppliers in full under normal terms for goods and services provided on or after the date of filing.”

Established in 2014 and headquartered in Fontana, California, Kal Freight offers a complete range of integrated transportation and logistics services to diverse industries across the US. Its 800 drivers, 800 trucks and 2200 trailers operate across seven terminals in Fontana, Texas, New Jersey, Indiana, Tennessee, Georgia, Arizona and Arkansas.

Mr Sharp concluded: “Throughout the Chapter 11 process, Kal Freight aims to continue to serve its customers and trade partners and ensure the safety of its employees and fleet operations.”

News: California trucking company Kal Freight files for Chapter 11 restructuring

CareMax files for Chapter 11 bankruptcy and agrees asset sales

BY Richard Summerfield

CareMax Inc, which runs a system of medical centres catered toward elderly patients, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Northern District of Texas.

Miami-based CareMax filed Chapter 11 on Sunday, listing assets of between $100m and $500m, and liabilities between $500m and $1bn. CareMax sought court protection after cost cuts and attempts to refinance its debt.

As per the filing, CareMax has filed customary motions with the court, seeking authorisation to maintain business-as-usual operations, including by continuing operations to ensure patients at its clinics continue to receive high quality, value-based healthcare, paying associated wages, including for its doctors and nurses, without interruption and paying the existing pre-petition claims of certain vendors that are critical to the health and safety of CareMax’s patients and critical to the operation of the company’s medical centres.

The company has also announced it has entered into an agreement to sell its management services organisation. According to a statement announcing the deal, CareMax has entered into an agreement with an affiliate of Revere Medical which will see the company acquire the Medicare Shared Savings Program portion of the CareMax’s management services organisation that supports care provided to approximately 80,000 Medicare beneficiaries. The sale of the business is anticipated to be consummated simultaneously with the consummation of CareMax’s prearranged Chapter 11 plan.

CareMax also announced that it has reached an agreement in principle on a ‘stalking horse’ agreement with a third-party buyer for its operating clinic business. The closing of this sale is also anticipated to be consummated simultaneously with the consummation of CareMax’s bankruptcy plan. CareMax intends to disclose the proposed terms of the stalking horse agreement and the potential purchaser when and if an agreement is finalised.

“After a careful review of the Company’s strategic alternatives, we have determined that the transactions announced today are our best opportunity to protect the long-term value of the CareMax assets and ensure our patients, providers, and health plans can continue to rely on the comprehensive, coordinated care we provide,” said Carlos de Solo, chief executive of CareMax. “We are deeply appreciative of the outstanding team members across CareMax, whose hard work and commitment to our partners is resolute.”

CareMax’s Chapter 11 filing is the latest in a series of Chapter 11 filings by other healthcare groups this year, including Massachusetts-based Steward Health Care. Steward filed for bankruptcy in May, seeking to sell its 31 hospitals and address $9bn of debt.

News: Medical services provider CareMax files for Chapter 11 restructuring

TGI Fridays files for bankruptcy protection

BY Richard Summerfield

Citing financial challenges resulting from the coronavirus (COVID-19) pandemic and problems with the company’s wider capital structure, restaurant chain TGI Fridays Inc filed for Chapter 11 bankruptcy protection on Saturday in the Northern District of Texas.

In a filing with the court, the company listed both assets and liabilities in the range of $100m to $500m. TGI Fridays, which is privately owned by TriArtisan Capital Advisors, will use the Chapter 11 process to “explore strategic alternatives in order to ensure the long-term viability of the brand”.

Founded in 1965 as a bar in New York, TGI Fridays rapidly expanded over the decades, peaking in 2008 with 601 restaurants in the US and a $2bn business. Today, the company counts 163 restaurants in the US, down from 269 last year. It closed 36 in January and dozens more in the week prior to the filing. The company’s sales in the US were $728m in 2023, down 15 percent from the prior year, according to Technomic.

However, thanks to the company’s franchise model, TGI Fridays said it only owns and operates 39 restaurants in the US, which is just a fraction of the 461 TGI Fridays-branded restaurants around the world. A separate entity, TGI Fridays Franchisor, owns the company’s intellectual property and has franchised the brand to 56 independent owners in 41 countries. Those other locations remain open.

“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world,” said Rohit Manocha, executive chairman of TGI Fridays. “The primary driver of our financial challenges resulted from COVID-19 and our capital structure. This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”

In September, British restaurant operator Hostmore abandoned plans to buy TGI Fridays after it was removed as the manager of TGIF Funding, which owns the right to collect royalties from the restaurant chain franchise. Hostmore's shares plummeted 90 percent, eventually leading it to announce plans to enter administration due to overwhelming debt.

The US casual dining industry has endured a turbulent few months. In September, a US bankruptcy judge approved a reorganisation plan for seafood chain Red Lobster after years of mounting losses. Italian American food chain Buca di Beppo filed for bankruptcy protection in August.

News: TGI Fridays operator files for bankruptcy amid financial woes

Auto parts provider ATD files for Chapter 11

BY Fraser Tennant

In what is the latest auto parts provider to head to bankruptcy court, American Tire Distributors (ATD) has filed for Chapter 11 bankruptcy in order to implement a restructuring support agreement (RSA).

The Chapter 11 filing is the second time ATD has sought bankruptcy protection in six years – one of a number of auto parts retailers and distributors that have been battling financial distress in 2024 as they face headwinds from several industry challenges.

The RSA contemplates transitioning ownership of the company through a competitive sale process with certain lenders, including credit funds and accounts managed by Guggenheim Partners Investment Management, LLC, KKR, Monarch Alternative Capital LP, Sculptor Capital Management, Inc. and Silver Point Capital, L.P.

The contemplated transaction would eliminate a significant amount of debt and provide access to new capital, positioning the business as a stronger partner to manufacturers and customers who rely on ATD to improve their productivity, profitability and performance.

“For nearly 90 years, ATD has continuously evolved to meet the dynamic shifts and challenges facing the auto aftermarket,” said Michael Feder, interim chief executive of ATD. “We are now taking further steps to position ATD for our next phase as a stronger distribution partner to our manufacturers and customers as we return to our roots and hone our core value proposition as a wholesale distributor.

“Since being named interim chief executive, I have seen how impactful our business is to the manufacturer partners, customers, associates and communities we support, and this process will serve to reinforce those relationships,” he continued. “Our operations remain steady and, by moving forward with new owners on stronger financial footing.”

To ensure continued business operations, ATD has secured commitments for $250m in new financing from the aforementioned lender group, as well as access to $1.2bn in debtor in possession (DIP) financing from lenders under the company’s prepetition asset-based lending (ABL) facility , in the form of post-petition financing credit facilities. 

Upon court approval, the DIP financing, coupled with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the business during the Chapter 11 and RSA processes.

Mr Feder said the company was confident that entering into these processes with the support of the lender group would enable ATD to execute its business strategy and achieve our long-term objectives.

News: American Tire Distributors lines up sale to lenders in bankruptcy