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Executive Summary

Inotiv files for Chapter 11 bankruptcy with a prepackaged plan that cancels all existing common equity. Total funded debt of $488.7 million will be reduced to $163.3 million, with first-lien lenders receiving 93% of new equity and exit term loans, while PIK and convertible noteholders receive a 7% equity stake and warrants. Existing shareholders will receive no distribution.

Key Financial Metrics

Key Facts

• Total prepetition funded debt of $488.7 million ($274.9M first lien, $28.3M PIK notes, $131.7M convertible notes, $40.5M bridge facility, $13.3M DOJ settlement).
• Plan reduces funded debt to $163.3 million post-emergence via a $150M exit term loan facility and reinstates DOJ settlement payments.
• First-lien claims (Class 3) receive 93% of new equity and remaining exit term loans; PIK notes (Class 5) and convertible notes (Class 6) together receive 7% of new equity and new warrants.
• Existing common equity (Class 11) is cancelled with no distribution; company will become private and delist from Nasdaq.
• Plan is supported by >66.67% of each voting class and a Restructuring Support Agreement (RSA) is in place.
• DIP facility of $65.5 million ($25M new money + $40.5M roll-up of bridge loans) to fund operations during Chapter 11.
• Voting deadline for impaired creditors is July 6, 2026; expected emergence on July 17, 2026.

Financial Impact

Equity holders receive nothing; total funded debt reduced from $488.7M to $163.3M (66.6% deleveraging).

Risk Factors

• Plan confirmation or consummation could be delayed if conditions precedent (including Bankruptcy Court approval) are not met.
• If the plan fails, alternative outcomes (Chapter 7 liquidation) could produce even lower recoveries.
• Potential objecting creditors or regulatory hurdles could disrupt the timeline.

Market Snapshot

Investment Themes

Documents Analyzed

This report is based on 2 SEC documents filed with EDGAR.

US Market Status