Apple Tree Life Sciences: $6.5B Biotech VC Fund Files Chapter 11 Amid Governance Battle

Apple Tree Life Sciences, Inc. and its affiliates—the New York City-based biotechnology venture capital platform that has invested over $2.5 billion across 45 companies since 1999—filed for chapter 11 bankruptcy on December 9, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The filing came four days after the Fund obtained a $96.9 million judgment against its own primary investor, Russian billionaire Dmitry Rybolovlev.

The filing centers on a governance dispute with Rybolovlev, whose family office Rigmora Holdings provided approximately 98% of the Fund's capital over a 13-year partnership. Apple Tree reported a fund valuation of approximately $6.5 billion at filing with effectively no secured debt.

The bankruptcy triggered parallel proceedings in three courts: U.S. Bankruptcy Court in Delaware, Delaware Court of Chancery, and the Grand Court of the Cayman Islands, where Rigmora had filed a competing winding-up petition to liquidate the partnership. Approximately 30 biotech portfolio companies—including clinical-stage firms developing treatments for cancer, genetic diseases, and infectious diseases—depend on continued Fund capital, and the proceedings focus on whether chapter 11 should proceed alongside the Cayman winding-up petition.

Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-12604 (Lead)
Petition Date	December 9, 2025 (initial); December 15, 2025 (portfolio companies)
Judge	Hon. J. Kate Stickles
Debtor(s)	Apple Tree Life Sciences, Inc. and 6 affiliated entities
Stated Assets	$1 billion - $10 billion
Stated Liabilities	~$200,000
Fund Valuation	~$6.5 billion (early 2025)
Cash on Hand	~$17.3 million
Delaware Chancery Judgment	$96,960,925.88 (against Rigmora LPs)
Unfunded PortCo Commitments	$221+ million

Company Background and Investment History

Founding and Investment Philosophy.

Apple Tree Partners (ATP) was founded in 1999 by Dr. Seth L. Harrison, a medical doctor and MBA who began investing in life sciences in 1991 as a venture partner at Sevin Rosen Funds. Harrison holds an AB from Princeton, an MD and MBA from Columbia, and completed a surgery internship at Columbia Presbyterian Medical Center before transitioning to venture capital. He served as a general partner at Oak Investment Partners before founding ATP.

The firm established itself in life sciences venture capital, building companies from pre-IP ideas through asset spinouts and investing from seed stage through IPO. ATP's core strategy involved providing flexible capital paired with operational support from a team of venture partners and executives-in-residence.

Track Record and Notable Exits.

ATP's debut fund, ATP I, became the second-highest returning fund globally for its 1999 vintage. Over 25 years, the firm delivered a distributed-to-paid-in (DPI) ratio of 1x on $2.5 billion invested. The Fund has made distributions to limited partners exceeding $2 billion.

The 2019 dual IPOs of Stoke Therapeutics (genetic disease therapies) and Akero Therapeutics (metabolic disease) increased the cumulative $150 million investment to a 4.9x return by 2020. The 2018 sale of Syntimmune—acquired for $278 million upfront with potential milestone payments up to $603 million—provided an additional exit.

Current Portfolio.

As of the bankruptcy filing, ATP has invested in 45 companies, with 5 IPOs and 15 acquisitions completed. The current portfolio includes approximately 30 active companies across preclinical, clinical, and commercial stages.

Clinical-Stage Companies:

Portfolio Companies in Chapter 11 (Debtor Entities):

• Apertor Pharmaceuticals, Inc.
• Initial Therapeutics, Inc.
• Marlinspike Therapeutics, Inc.
• Red Queen Therapeutics, Inc.

These four portfolio companies filed chapter 11 petitions on December 15, 2025, six days after the parent entities.

Other Preclinical Portfolio Companies:

• Aethon Therapeutics
• Deep Apple Therapeutics
• Evercrisp Biosciences
• Nine Square Therapeutics
• Opal Biosciences

Fund Structure.

The Apple Tree investment platform operates through a layered structure spanning U.S. and Cayman Islands entities:

The Rybolovlev Partnership

The Russian Billionaire Backer.

Dmitry Yevgenyevich Rybolovlev is a Russian oligarch who became chairman of fertilizer producer Uralkali in 1995 and sold his majority stake in 2010 for $6.5 billion. As of 2021, Forbes ranked him 391st globally with a net worth of $6.7 billion. He is the majority owner and president of AS Monaco football club and has been involved in art acquisitions. Rybolovlev holds an MD from Perm State Medical Institute.

Both Rybolovlev and Harrison are medical doctors. In October 2012, they formed Apple Tree Partners IV, L.P. (later renamed ATP Life Science Ventures, L.P.) through a Cayman Islands exempted limited partnership structure. The partnership allowed Rybolovlev or his family office to approve "budgets" for new portfolio company investments.

Financial Commitment and Capital Flow.

Rigmora's capital accounted for approximately 98% of all Fund contributions, creating a concentration of economic interest in a single limited partner. Harrison contributed $54.7 million personally, with 14 additional carried interest limited partners participating in the Fund's economics.

The Partnership Breakdown: 2022-2025

From Ukraine Invasion to Funding Freeze.

The partnership entered a dispute in late 2022 during market downturns in biotech and geopolitical instability following Russia's February 2022 invasion of Ukraine. Rigmora's enthusiasm for the partnership reportedly "disappeared entirely" following the invasion.

Although Rybolovlev is not sanctioned by the United States, United Kingdom, or European Union, he is sanctioned by Ukraine. According to court filings, KYC regulatory concerns and fears of potential future sanctions made banks, potential investors, and business partners reluctant to engage with ATP-related entities.

The $96.9 Million Judgment.

On December 5, 2025—four days before the chapter 11 filing—Delaware Chancery Court Judge Kathaleen St. J. McCormick ordered Rigmora to pay $96,960,925.88 in response to capital calls issued by ATP on May 30, 2025. The capital calls totaled approximately $106 million, of which the court ordered specific performance of nearly $97 million.

Rigmora had argued it had already invested approximately $2.7 billion—exceeding its commitment. However, the court found that Rigmora had "double-counted" some contributions and still had room to provide required funding. Judge McCormick stated that "the public interest strongly favors preserving potentially life-saving research programs."

Rigmora indicated it would appeal the ruling.

Competing Narratives.

ATP's Position:

• Rigmora "purposely withheld funds" over 18 months and refused to approve any new budgets
• The Delaware Chancery ruling ($96.96 million) vindicates ATP's conduct
• Portfolio companies face "imminent collapse" without funding
• The Cayman winding-up petition is retaliatory
• Chapter 11 provides a forum to address disputes while preserving portfolio company value

Rigmora's Position:

• ATP engaged in "mismanagement and lack of probity"
• Rigmora "lost trust and confidence in ATP" due to management failures
• The chapter 11 filing is "nothing more than a delay tactic" and a "desperate attempt to avoid oversight" by Cayman courts
• The Fund should be liquidated through Cayman proceedings
• Rigmora has already invested $2.7 billion—exceeding its commitment

Operational Deterioration Pre-Filing

During the 18-month funding gap, ATP scaled down operations. The firm reduced its workforce from approximately 100 employees to 17 full-time staff at filing. The company also ceded technology assets back to their sources and scaled down operations.

Financial Position at Filing.

At the December 15, 2025 status conference, Debtor's counsel noted: "One good fact, a little unusual for large chapter 11s, there is effectively no secured debt, so we don't really have any cash collateral issues."

Chapter 11 Proceedings

Case Timeline.

First Day Relief.

The Debtors sought and obtained first day relief and did not seek DIP financing or cash collateral motions:

The segregated bank account order requires that the $96,960,925.88 from the Delaware Chancery judgment be held in a restricted account pending further proceedings. Additionally, the Debtors seek authority to make approximately $9.3 million in secured loans to portfolio companies to continue R&D operations. Total unfunded commitments to portfolio companies exceed $221 million.

The Motion to Dismiss.

Rigmora filed a motion to dismiss the chapter 11 cases seeking to terminate the proceedings.

Grounds for Dismissal:

1. Bad faith filing: Cases filed solely to thwart Cayman Islands winding-up proceedings
2. Solvency: Debtors are solvent with minimal traditional debt
3. No reorganization purpose: No legitimate business need for chapter 11
4. Foreign proceeding priority: Cayman court has exclusive jurisdiction over governance questions for the Cayman exempted limited partnership
5. Abstention: Court should abstain in favor of Cayman proceedings

At the December 15 status conference, Judge Stickles declined to rule on shortened time: "Given the complicated nature of this matter as it's being described to me, I need briefing and I need time to consider the briefing on the motion to dismiss."

The court ordered a full briefing schedule rather than the expedited timeline Rigmora requested.

Cross-Border Jurisdictional Conflict.

The case involves parallel proceedings across three jurisdictions:

The automatic stay triggered by the chapter 11 filing has affected the Cayman proceedings. The U.S. Bankruptcy Court granted relief from the automatic stay for a limited Cayman pre-trial conference to proceed, and the Cayman court vacated the January 2026 trial date. On December 23, 2025, the Debtors filed a sealed motion alleging that Rigmora violated the automatic stay by pursuing certain actions in the Cayman proceedings, seeking sanctions against Rigmora for the alleged violations.

Automatic Stay Litigation.

The automatic stay has become the subject of contested litigation between the Debtors and Rigmora:

Debtors' Motion to Enforce Stay (December 31, 2025): The Debtors filed a motion to enforce the automatic stay and impose sanctions against Rigmora. A redacted version was filed publicly, with portions remaining sealed.

Rigmora's Motion for Relief from Stay (January 6, 2026): Rigmora filed a motion seeking relief from the automatic stay to continue pursuing the Cayman Islands winding-up proceedings. Rigmora argues the automatic stay should not apply to its Cayman litigation or, alternatively, that the court should grant relief from the stay to allow those proceedings to continue.

13-Week Cash Flow Projections

The Debtors filed a 13-week cash flow budget (Project Newton) projecting the following through March 10, 2026:

The projections assume collection of the Delaware Chancery judgment—which Rigmora has indicated it will appeal—and potential DIP financing of $20 million.

Industry Context: Biotech Venture Capital Under Pressure

The Two-Speed Capital Market.

ATP's dispute unfolded during a period of reduced biotech venture capital activity. By mid-2025, the sector showed mixed conditions:

• Public markets remained largely unreceptive, with IPO windows opening only intermittently
• Established venture firms continued amassing record dry powder
• Early-stage startups struggled to raise capital while large funds raised the largest vehicles in their histories

Q3 2025 showed improvement, with biotech venture funding increasing 70.9% from Q2 ($1.8 billion to $3.1 billion) following Federal Reserve rate cuts in September 2025 and lower cost of capital. The chapter 11 filings focus on the governance dispute with the Fund's limited partner and related capital calls.

Professional Retentions

Perry M. Mandarino was appointed Chief Restructuring Officer on December 10, 2025. He is Head of Restructuring and Senior Managing Director at B. Riley Restructuring Services, with approximately 35 years of restructuring experience including prior service as a partner and leader of the Business Recovery Services Practice at PricewaterhouseCoopers. His prior CRO engagements include Hoop Holdings (The Disney Stores) and MIIX Group Holdings.

Key Disputes and Open Questions

The Solvency Defense.

Rigmora's assertion that the Debtors are solvent—with minimal traditional debt, $6+ billion in Fund assets, and a $97 million judgment receivable—is central to its motion to dismiss. Under section 1112(b) of the Bankruptcy Code, a court may dismiss a case filed in bad faith or where there is no reasonable likelihood of reorganization. Rigmora argues both apply here.

Preservation of Research Programs.

The Debtors argue that chapter 11 protection is necessary to preserve portfolio company research programs. Portfolio companies like Red Queen Therapeutics—which holds a BARDA contract for developing pan-influenza therapeutics—and Ascidian Therapeutics—conducting the first clinical trial of an RNA exon editor—are developing treatments for infectious disease and genetic conditions.

The Delaware Chancery Court noted that "the public interest strongly favors preserving potentially life-saving research programs," a finding the Debtors cite in support of continued chapter 11 protection.

The Governance Question.

The filings address whether chapter 11 should proceed alongside the Cayman winding-up petition. The case lacks many hallmarks of traditional chapter 11 proceedings:

• No secured debt
• No DIP financing (initially)
• No cash collateral issues
• No trade creditor claims of significance
• Solvent debtor entities

An Official Committee of Unsecured Creditors was appointed on January 20, 2026, represented by Cole Schotz P.C.

What Happens Next

Pending matters include:

1. Motion to Dismiss Briefing: Full briefing on Rigmora's amended motion to dismiss is underway.

2. Delaware Chancery Judgment Collection: Rigmora has indicated it will appeal the $96.9 million judgment.

3. Portfolio Company Funding: The Final Portfolio Company Secured Loans Order was entered January 24, 2026, authorizing the Debtors to make secured loans to portfolio companies for ongoing R&D.

4. Cayman Proceedings: A February 2, 2026 preliminary issues trial is scheduled in the Cayman Islands.

5. Plan of Reorganization: The Debtors have indicated an intent to submit a plan of reorganization.

6. Automatic Stay Motions: The Debtors' Motion to Enforce Stay and Rigmora's Motion for Relief from Stay are pending. Resolution will determine whether Cayman proceedings may continue during the chapter 11 case.

7. UCC Activity: The Official Committee of Unsecured Creditors, appointed January 20, 2026 and represented by Cole Schotz P.C., will participate in the case going forward.

Frequently Asked Questions

What is Apple Tree Partners?

Apple Tree Partners is a New York-based life sciences venture capital firm founded in 1999 by Dr. Seth L. Harrison. The firm has invested over $2.5 billion in approximately 45 biotechnology companies, with 5 IPOs and 15 acquisitions. Portfolio companies focus on cutting-edge areas including RNA editing, cancer immunotherapy, and antiviral therapeutics.

Why did Apple Tree file for bankruptcy if it's worth $6.5 billion?

This is a governance dispute, not traditional financial distress. Apple Tree filed chapter 11 amid a winding-up proceeding in the Cayman Islands brought by investor Rigmora, controlled by Russian billionaire Dmitry Rybolovlev. Rigmora allegedly withheld capital for 18+ months following Russia's 2022 invasion of Ukraine. The Fund has effectively no secured debt and minimal unsecured liabilities.

Who is Dmitry Rybolovlev?

Rybolovlev is a Russian oligarch worth approximately $6.7 billion who made his fortune from fertilizer companies Uralkali and Silvinit. Since 2012, he committed approximately $2.4-2.85 billion to Apple Tree through his family office Rigmora Holdings, representing roughly 98% of Fund capital. He is also majority owner of AS Monaco football club. Rybolovlev holds an MD from Perm State Medical Institute.

What is the $96.9 million judgment about?

On December 5, 2025—four days before the bankruptcy filing—Delaware Chancery Court ordered Rigmora to pay $96,960,925.88 in response to capital calls issued by ATP in May 2025. The court found that Rigmora had "double-counted" some contributions and still had room to provide required funding. Rigmora has indicated it will appeal.

What portfolio companies are affected?

Approximately 30 biotech companies depend on ATP funding. Clinical-stage firms include Ascidian Therapeutics (RNA editing; first RNA exon editor in clinical trials), Marengo Therapeutics (cancer immunotherapy; FDA Fast Track for invikafusp), and Red Queen Therapeutics (antivirals; BARDA contract). Four portfolio companies—Apertor, Initial, Marlinspike, and Red Queen—also filed chapter 11.

Why are there proceedings in three different courts?

This case involves: (1) U.S. Bankruptcy Court in Delaware (chapter 11); (2) Delaware Court of Chancery (the $96.96 million capital call judgment); and (3) Grand Court of the Cayman Islands (Rigmora's winding-up petition). The Fund is a Cayman Islands exempted limited partnership, creating cross-border complexity as governance disputes over Cayman partnerships are typically resolved under Cayman law.

What is the motion to dismiss about?

Rigmora filed a motion to dismiss arguing the chapter 11 was filed in "bad faith" solely to thwart the Cayman winding-up proceeding. Rigmora asserts the Debtors are solvent with minimal debt and have no legitimate reorganization purpose. The court has ordered full briefing rather than expedited consideration.

How does this case compare to other chapter 11 filings?

Unlike typical chapter 11 cases, this case has effectively no secured debt, no DIP financing (at filing), no cash collateral issues, and no creditors' committee. The Debtors have approximately $200,000 in traditional unsecured liabilities against a Fund valued at $6.5 billion. The case involves a governance dispute between a general partner and limited partner rather than a traditional financial restructuring.

Is Rybolovlev sanctioned?

Rybolovlev is sanctioned by Ukraine but not by the United States, United Kingdom, or European Union. However, court filings indicate that KYC regulatory concerns and fears of potential future sanctions have made banks, investors, and business partners reluctant to engage with ATP-related entities.

What happens to the biotech research if the Fund is wound up?

The Delaware Chancery Court stated that "the public interest strongly favors preserving potentially life-saving research programs." Portfolio companies like Red Queen (developing pan-viral treatments with BARDA funding), Ascidian (first RNA exon editor in clinical trials for Stargardt disease), and Marengo (cancer immunotherapy with FDA Fast Track designation) have research programs funded by ATP.

What is the automatic stay litigation about?

The automatic stay—which halts most actions against debtors upon a chapter 11 filing—has become contested. On December 31, 2025, the Debtors filed a Motion to Enforce Stay and impose sanctions against Rigmora. On January 6, 2026, Rigmora filed a Motion for Relief from Stay seeking permission to continue the Cayman Islands winding-up proceedings. These competing motions will determine whether the governance dispute is resolved primarily in U.S. bankruptcy court or Cayman proceedings.

Who is the claims agent for Apple Tree Life Sciences?

Verita Global (formerly Kurtzman Carson Consultants, LLC) serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

Read more chapter 11 case research on the ElevenFlo blog.