Russian-backed Buyk files Chapter 11 with plans to sell all assets

By Sarah Lizee

Olympia, Wash., March 18 – Buyk Corp. filed Chapter 11 bankruptcy Thursday in the U.S. Bankruptcy Court for the Southern District of New York with plans to sell its assets through an auction process, according to court documents.

In April 2021, the company began operating an ultra-high speed grocery business with locations in New York and Chicago.

After an initial seed round of investment by Russian-based investors in the amount of about $63.5 million in convertible notes and $11 million in unsecured loans in January, the debtor was in the process of a seeking additional equity investment of roughly $250 million.

Due to signs of a potential Russian dispute with Ukraine, in January, Buyk decided to pivot to a U.S.-based equity raise and actively sought series A funding from numerous institutional investors. The company said the fund raising was going reasonably well until Russia began its invasion of Ukraine.

“At that juncture, the debtor was confronted with an existential and, ultimately, fatal crisis,” the company said in court documents.

Buyk said that any chance of obtaining equity or debt investment from the investors that had been interested in funding the debtor was lost, and although the debtor was operating and earning revenue, it was in the beginning stages of its growth and was relying on cash infusions by the founders to continue.

Although the founders were not subject to any sanctions, restrictions on the ability to transfer any funds out of Russia made it impossible for the founders to provide any further funding to the debtor.

Buyk said that it has furloughed about 98% of its employees.

After having discussions with over 30 potential funding sources, the company entered into a term sheet with Legalist DIP GP, LLC for a six-month debtor-in-possession loan commitment of $6.5 million. The loan provides for two draws, with a $4 million draw made on March 11 for the purpose of payroll obligations for the company’s terminated employees, and $2.5 million to be drawn post-petition following court approval.

Interest is the U.S. prime rate plus 11.75% per year. The prime rate is subject to a 4% floor. There is a 2.75% one-time commitment fee and a 1.75% monitoring fee.

The company is also seeking court approval to access cash collateral.

Buyk said its goal is to complete the sale process within 60 days and to then seek confirmation of a plan of liquidation to distribute the remaining sale proceeds after satisfaction of the DIP loan.

The debtor said it has sufficient funds and anticipated revenues from prospective asset sales to operate in liquidation mode through, at least, the first 13 weeks of the Chapter 11 cases.

The company listed $10 million to $50 million in both debt in liabilities in its petition. However, it listed unsecured creditors with claims of more than $50 million.

Some of these include Grayskies Ltd., based in Tortola, British Virgin Islands, with a $15 million convertible promissory note claim, MVOF LP, based in George Town, Grand Cayman, with a $14.5 million convertible promissory note claim, Smart Retail, LLC, based in St. Petersburg, with an $11 million loan claim, Citrus, based in Tortola, British Virgin Islands, with a $10 million convertible promissory note claim, FRV, based in Grand Cayman, with a $9 million convertible promissory note claim, Pinkback LLC, based in Lewes, Del., with a $6 million convertible promissory note claim, and SBT Venture Fund II, LP, based in Grand Cayman, with a $5 million convertible promissory note claim.

Akerman LLP is bankruptcy counsel.

Buyk is a New York-based grocery delivery service. The Chapter 11 case number is 22-10328.

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