Nashville-Based SmileDirectClub Announces Liquidation After Recent Chapter 11 Bankruptcy Filing
SmileDirectClub, the Nashville-based teeth straightening company is shutting down, less than three months after filing for Chapter 11 bankruptcy protection. The company announced on December 8, 2023 that it had made an “incredibly difficult decision to wind down its global operations, effective immediately.”
SmileDirectClub filed for Chapter 11 bankruptcy protection at the end of September in the U.S. Bankruptcy Court for the Southern District of Texas. At the time of the filing, the company reported nearly $900 million in debt. In announcing the shut down, the company said that it was unable to find a partner willing to contribute sufficient capital to keep the company afloat.
The company will likely utilize the Chapter 11 process to wind up its affairs under the supervision of the Bankruptcy Court. In a typical Chapter 11 liquidation scenario, the debtor's assets are sold and claims are paid in order of priority beginning with secured creditors (up to the value of their collateral), then priority claims that may include certain tax debts and wage claims. If any funds remain, they are distributed on a pro rata basis to unsecured creditors.
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