SmileDirectClub files Chapter 11 plan and disclosure statement

By Sarah Lizee

Olympia, Wash., Oct. 31 – SmileDirectClub Inc. filed a Chapter 11 plan and related disclosure statement on Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan contemplates a dual-track process.

The debtors may pursue a going-concern sale of their equity under a plan of reorganization or allow for any other restructuring transactions that parties wish to propose, in partnership with the founders or otherwise, to the highest or otherwise best bidder.

Alternatively, if a going-concern transaction cannot close, the plan provides for a toggle to an orderly wind-down of operations through the liquidation of the debtors’ assets and distribution of proceeds to creditors.

The company has set out a bid deadline of Nov. 23.

Under the plan, other secured claims and other priority claims are unimpaired.

Holders of HPS Investment Partners, LLC guarantee claims will receive, if a restructuring occurs, new unsecured guarantees provided by SmileDirectClub, LLC or one or more of the other post-effective date debtors (or any respective successors), as applicable, guaranteeing the debt under the amended HPS credit facility. In the case of a winddown, holders will receive their pro rata share of a class allocable share of excess distributable cash.

General unsecured claimholders and convertible note claimholders will receive a pro rata share of the class allocable share of an unsecured claims recovery pool if a restructuring occurs. Otherwise, holders will receive their pro rata share of a class allocable share of the excess distributable cash.

Intercompany claims will be reinstated or set off, settled, distributed, contributed, canceled, released or otherwise addressed.

Interests will be canceled with no distribution.

SmileDirectClub is a Nashville-based oral care company. It filed bankruptcy on Sept. 29 under Chapter 11 case number 23-90786.

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