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Nashville-Based SmileDirectClub Files to Reorganize Under Chapter 11

On September 29, 2023, SmileDirectClub, Inc. and 8 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. The company was founded in 2014 and is headquartered in Nashville, Tennessee.


According to a press release issued by the company, "SmileDirectClub will seek to recapitalize through a transaction where the Company’s founders have committed to invest at least $20 million to bolster the Company’s balance sheet and to protect its near- and long-term financial health. Up to $60 million of additional capital is available upon satisfaction of certain conditions, including the favorable conclusion of a marketing process."


The Chapter 11 filing comes nearly two months after SmileDirectClub released its latest earnings report. In Q2, the company reported a loss of $54 million on total revenues of $102 million. As part of the Q2 earnings release, the company implemented a $10 million founder funded revolving credit facility.


Chapter 11 is a restructuring vehicle that provides a company (or individual with a complex financial situation) protection from creditor actions. Filing a Chapter 11 petition triggers an "automatic stay," which stops nearly all lawsuits, collection actions, and payments on debts that existed prior to the filing. This can allow the company to stockpile cash and give management breathing room to focus on profitability, make operating decisions, and formulate a reorganization plan.

 
EmergeLaw, PLC - Nashville Chapter 11 Attorneys

About EmergeLaw, PLC



EmergeLaw is a boutique law firm that represents small and middle market businesses and their owners in debt workouts, Chapter 11 reorganizations, Subchapter V restructurings, and other proceedings to help them deleverage and reposition for future success. Applying decades of experience and a specialized toolkit, our Nashville Chapter 11 attorneys help entrepreneurs, family businesses, private equity funded companies, and real estate investors maximize value in ways that many clients find unexpectedly efficient and effective.




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