New Delaware Chapter 11 Filing – Xtera Communications, Inc.

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On November 15, 2016, Texas-based Xtera Communications, Inc. and seven of its affiliates filed voluntary petitions for chapter 11 bankruptcy relief in the United States Bankruptcy Court for the District of Delaware (Case No: 16-12577). XTERA is a leading provider of high-capacity, cost-efficient optical transport solutions that it sells to telecommunications service providers. According to the First Day Declaration, the Debtors have experienced significant liquidity issues during the past nine months caused by, among other things, the expiration of certain key contracts. The petition lists between $50 million and $100 million in both assets and liabilities. The Debtor’s stock was delisted from NASDAQ a few weeks ago. According to the First Day Declaration, Xtera enters bankruptcy with Neptune Bidco as the proposed stalking horse bidder in a sale of substantially all of the Debtors’ assets for a purchase price of $10 million.  The agreement with Neptune Bidco further contemplates senior DIP financing secured by all of the Debtors’ assets in the amount of $7.4 million. The Debtors seek joint administration of these cases. Epiq Systems, Inc. is the proposed claims agent.  The cases have been assigned to the Honorable Kevin J. Carey.

Contact Norman L. Pernick and  Nicholas J. Brannick for more information.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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