SmileDirectClub looks to wind-down after failed going-concern attempt

By Sarah Lizee

Olympia, Wash., Dec. 8 – SmileDirectClub Inc.’s counsel provided the U.S. Bankruptcy Court for the Southern District of Texas with a disappointing update on Friday, saying the company is now pivoting to a wind-down since it has been unable to reach a going-concern sale deal.

After two months of marketing, the debtors were working with a bidder that had submitted a proposal to partner with the company’s founders to fund a going-concern plan. However, that party withdrew its offer on Dec. 2.

Under the company’s debtor-in-possession financing agreement, $20 million was funded when the case started, and another $30 million would be available if a going-concern bid was in hand by Dec. 3.

Without any third-party offers, the debtors went back to the founders and asked them to fund the going-concern plan on a stand-alone basis. They expressed a willingness to do so if they could reach an agreement with the debtors’ asset-based lending facility lender and the official committee of unsecured creditors.

Negotiations between the parties lasted until the afternoon of Dec. 7, but by that time, it became clear that no deal could be reached, the debtors’ counsel said.

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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