SVXR, Inc. – Bankruptcy Unicorn? Further to Bruker Nano Sale, Debtor Seeks Dismissal of Case; Anticipates Full Recovery for Creditors and Possible Recovery for Equity

Register, or to view the article

September 27, 2021 – The Debtor filed a motion seeking dismissal of its Chapter 11 case [Docket No. 125]. As the Debtor, founded in 2013 to provide "high speed inspection and metrology technology to the semiconductor packaging industry," points out, this is an unusual dismissal motion, reflecting a "result rarely seen in bankruptcy cases." 

Following the sale of their assets to Bruker Nano, the Debtors now believe that creditors may see a full recovery and that even equity is in with a chance as to some sort of distribution. With dismissal motions normally filed in respect of bankruptcies no-hopers, this is a rare filing indeed.

The Debtor's motion [Docket No. 125] reads: “The Debtor filed this chapter 11 case to complete an approximately year-long marketing and sale process that began in September 2020. Following a robust pre- and post-petition process, on September 9, 2021, the Debtor closed the sale of substantially all of its assets to its stalking horse bidder Bruker Nano, Inc. (‘Bruker’)—only 36 days after the Debtor filed for chapter 11 protection. Now that the Sale has been consummated, the Debtor seeks to dismiss this chapter 11 case to maximize the recoveries for all of the Debtor’s economic stakeholders. As set forth more fully below, based on current working-capital calculations, the Debtor believes that unsecured creditors will receive substantial—if not full—recoveries from the Debtor’s sale proceeds. Moreover, enough sale proceeds may, in fact, remain after fully paying unsecured creditors that the Debtor’s equity holders may receive a distribution.

Recoveries of this magnitude—an overwhelmingly positive result rarely seen in bankruptcy cases—can only occur if this chapter 11 case comes to a swift and efficient conclusion. Following the sale, the Debtor has no operations and no remaining assets beyond the sale proceeds and, accordingly, no material source of income. The Debtor has already paid off its debtor-in-possession financing facility, prepetition secured notes, and senior secured loan of the U.S. Small Business
Administration. Thus, at this point, the continuation of this chapter 11 case, or the conversion to chapter 7, will only reduce creditor recoveries through the incurrence of administrative expenses without providing any tangible benefit to such creditors and other parties in interest. Following the dismissal, the Debtor intends to wind down its business in accordance with applicable law, providing a fair, efficient, and cost-effective alternative to a case under the Bankruptcy Code."

Asset Sale Background

On September 3rs, the Court hearing the SVXR case issued an order approving the $11.86mn sale of substantially all of the Debtor's assets to stalking horse Bruker Nano, Inc. (the “Stalking Horse Bidder” or “Bruker Nano”) [Docket No. 106].

On August 23rd, absent any further qualified bids, the Debtor had canceled the auction scheduled for August 25, 2021 and designated Bruker Nano, Inc. as the successful bidder [Docket No. 76]. 

Bruker Nano's August 3, 2021 stalking horse APA is attached to the Debtor's bidding procedures motion [Docket No. 20] as Exhibit B (p.60).

Bruker Nano, Inc. (an affilliate of Bruker Corp, Nasdaq: BRKR) describes itself as "enabling scientists to make breakthrough discoveries and develop new applications that improve the quality of human life. Bruker’s high-performance scientific instruments and high-value analytical and diagnostic solutions enable scientists to explore life and materials at molecular, cellular and microscopic levels." 

About the Debtors

According to the Debtor: “Based in San Jose, California, SVXR was founded in 2013 expressly to bring high speed inspection and metrology technology to the semiconductor packaging industry. SVXR’s founders anticipated the need to deploy inline 100% transmissive inspection into the semiconductor packaging manufacturing process and developed the company’s technology with this end in mind. The results, SVXR’s HR-AXI technology suite brings together the company’s unique data acquisition architecture with proprietary machine learning analysis techniques to provide customers with process monitoring and defect detection capabilities not found on any other products in the market. 

Read more Bankruptcy News