Danimer Scientific: SPAC Bioplastics Bet Ends in $19M Sale

Danimer Scientific, the Bainbridge, Georgia-based bioplastics company that raised approximately $380 million through a December 2020 SPAC merger with Live Oak Acquisition Corp., filed chapter 11 in March 2025 after it did not commercialize its proprietary polyhydroxyalkanoate biopolymer technology at profitable scale. The company reported $402 million in funded debt, $189.5 million invested in a paused manufacturing expansion, and an 82-person workforce that had been reduced from 170 employees in the weeks before the petition. The case moved from filing to consummation in just over four months, resulting in a $19 million sale to Teknor Apex Company—approximately 4.7% of total funded debt.

Company Background

Danimer Scientific was founded in 2004 in Bainbridge, Georgia, with the mission of developing biodegradable solutions and reducing dependence on traditional plastics. The company's technological foundation came through the 2007 acquisition of Procter & Gamble's intellectual property on polyhydroxyalkanoate (PHA) technology. Dr. Isao Noda, who had spent thirty years with P&G developing the technology, joined Danimer in 2013 to lead continued research and development. Stephen Croskrey was announced as CEO in May 2016, and the company formally adopted the Danimer Scientific name in October of that year.

The company's flagship product, Nodax PHA, is a proprietary polyhydroxyalkanoate biopolymer derived from plant oils. It was the first PHA certified as marine degradable and is capable of biodegrading in oceans, freshwater, and landfills. The production process used fermentation with canola oil consumed by soil bacteria. By the time of filing, Danimer held more than 750 patents in nearly 20 countries covering its biopolymer technologies. Key customers included Mars, PepsiCo, Nestlé, WinCup, Novamont, and Columbia Packaging Group.

SPAC Merger and Public Listing.

Danimer's trajectory changed with its December 29, 2020 business combination with Live Oak Acquisition Corp., a special purpose acquisition company. Live Oak had raised $200 million in its May 2020 IPO, and the merger attracted an additional $210 million private investment in public equity from institutional investors including Apollo Global Management and Federated Hermes. The deal valued Danimer at approximately $890 million and left the company with approximately $385 million in cash to fund its expansion plans. Stock began trading under ticker symbol "DNMR" on the New York Stock Exchange on December 30, 2020.

The SPAC capital enabled Danimer to pursue manufacturing expansion. Company leadership projected that with sufficient production capacity, PHA biopolymers could achieve cost parity with petroleum-based plastics and capture market share from companies seeking sustainable packaging solutions. The funds were deployed toward facility expansion, research and development, and working capital to support the commercialization push.

Manufacturing Footprint.

Danimer's Kentucky facility represented its first commercial-scale PHA plant. The company invested $36.2 million in 2018 to purchase and revitalize an 88,000-square-foot former Alltech algae building in Winchester, Kentucky. The facility sold its first full truckload of PHA resin in January 2020. A subsequent debottlenecking project completed in 2022 expanded capacity by 45 million pounds, bringing total plant capacity to 65 million pounds of finished product per year. The company later acquired additional capacity at the Kentucky facility from Cargill in October 2023.

The Greenfield facility announced in March 2021 was a central part of Danimer's expansion strategy. Governor Brian P. Kemp announced a $700 million expansion in Bainbridge that would nearly quadruple the workforce in Decatur County and create over 400 jobs. The new 2,000,000-square-foot facility was planned near the existing 25-acre campus, with projected annual production capacity of 125 million pounds and was described as creating the world's largest PHA plant. Danimer broke ground on construction in November 2021, with engineering cost estimates ranging from $515 million to $665 million.

Pre-Filing Distress

Despite the capital raised through the SPAC merger and investment in manufacturing capacity, Danimer did not achieve the commercial results projected. Multiple developments preceded the filing.

Revenue Decline and Operating Losses.

The company lost $72 million on $26 million in revenues during the first nine months of 2024. Production costs remained high relative to petroleum-based alternatives. Revenue declined from $79.5 million in 2022 to $53.6 million in 2023—a 33% drop—before falling further to $51.8 million in 2024. The company invested heavily in capacity that did not reach profitable utilization rates, contributing to operating cash burn and drawing down SPAC proceeds.

The commercial challenge was achieving production economics that could compete with petroleum-based plastics. While customers expressed interest in sustainable packaging alternatives, few were willing to pay the premium required to cover Danimer's production costs. The gap between PHA biopolymer pricing and manufacturing costs persisted.

Greenfield Facility Investment Freeze.

The company paused Greenfield facility construction. Through June 2023, the company had invested approximately $189.5 million in the expansion project. When construction was halted in Q4 2024, the investment did not generate production capacity or revenue by the time of filing. The partially completed facility left Danimer with debt service obligations tied to a non-operational project.

Wall Street Journal Investigation.

A March 2021 Wall Street Journal investigation headlined "Plastic Straws That Quickly Biodegrade in the Ocean? Not Quite, Scientists Say" challenged Danimer's biodegradability marketing claims. The print edition headline read "Claim of Ocean-Safe Plastic Seen as Inflated." On March 22, 2021, shares fell $6.43—approximately 13%—to close at $43.55. Danimer disputed the characterizations as inaccurate, and the article was followed by securities litigation.

A securities class action was filed on May 14, 2021 in the Eastern District of New York. The complaint named the company, CEO, CFO, and seven board members, alleging violations of the Securities Exchange Act based on deficient internal controls and misrepresented operations. The litigation imposed legal costs and management time during a period when the company was attempting to scale commercial operations.

The securities litigation was ultimately resolved in Danimer's favor. The Eastern District of New York dismissed the case in 2023, and the Second Circuit affirmed the dismissal on September 27, 2024. Three related shareholder derivative cases in Delaware were subsequently dismissed. The litigation consumed resources and management attention during the commercialization period.

Management Transition and NYSE Delisting.

CEO Stephen Croskrey, who had led the company since 2016 and guided it through the SPAC merger, announced his retirement on May 20, 2024. He resigned as Chairman effective immediately and stepped down as CEO in October 2024, with Richard Altice appointed as Interim CEO. The leadership transition occurred amid declining financial performance.

The company was subsequently delisted from the New York Stock Exchange after its market capitalization fell below the $15 million minimum threshold. The bankruptcy filing followed in March 2025.

Customer Disappointment.

A prospective major quick-service restaurant customer reduced its projected order volume, eliminating expected revenue that had supported the company's growth projections.

Capital Structure at Filing

Danimer's capital structure at filing reflected the company's growth strategy and subsequent distress. The $402 million in total funded debt had accumulated through multiple financing rounds intended to fund manufacturing expansion, with the unsecured convertible notes representing the largest single obligation.

Super Senior Bridge Facility. The $15.24 million bridge facility was provided by Jefferies Finance LLC as administrative agent, together with Riva Ridge Master Fund, Ltd. and BPI Co-Investment III, LLC. This facility held first lien on substantially all assets, positioning these lenders at the top of the capital structure waterfall. The bridge lenders later provided the DIP financing and achieved full recovery through the roll-up mechanism.

IP Term Loan. The $124.54 million senior secured facility bore interest at SOFR plus 8.00%, with Jefferies Finance LLC serving as administrative agent. This facility was secured by senior liens on the company's assets, including the intellectual property portfolio.

New Markets Tax Credit Loans. Six separate NMTC loan tranches totaling approximately $45.7 million were related to the Georgia facility financing. These loans carried specific structural features tied to the tax credit program requirements.

Convertible Senior Notes. The $216.9 million in unsecured convertible notes maturing December 15, 2026 represented the largest creditor constituency. These notes were issued in connection with or following the SPAC merger to investors betting on the company's commercial success. The unsecured status meant noteholders received only residual value after secured claims were satisfied, resulting in de minimis recovery given the sale proceeds.

DIP Financing

The DIP financing was provided by the same lenders who held the Super Senior Bridge Facility—Jefferies Finance LLC, Riva Ridge Master Fund, and BPI Co-Investment III—funding the chapter 11 case. The DIP Motion outlined the terms of the combined facility.

The $15 million DIP facility included $3 million in new money, with the remaining $12 million representing a roll-up of the prepetition Super Senior Bridge debt. This structure converted the prepetition claims to superpriority administrative expense claims under section 364(c)(1), with first-priority liens on DIP collateral under section 364(c)(2). The roll-up converted the bridge lenders' prepetition claims into postpetition priority claims while providing limited incremental liquidity to the estates.

The 12.5% per annum interest rate was supplemented by a 10.0% upfront fee and a 5.0% exit fee. Budget compliance was required with variance reporting, and milestones tied to the sale process timeline governed the case schedule.

Judge Walrath entered the Interim DIP Order on March 25, 2025, seven days after the petition date, authorizing access to the financing. The Final DIP Order followed on April 17, 2025, putting all terms in place for the sale process.

363 Sale Process

The company pursued a 363 sale process, filing the Sale Motion on March 27, 2025. Livingstone Partners LLC served as investment banker to market the company's assets to potential acquirers.

The marketing process sought buyers interested in Danimer's intellectual property portfolio, operating facilities, and established customer relationships. The sale was structured as a going-concern transaction covering the company's technology platform and operating assets.

Teknor Apex Acquisition.

Teknor Apex Company emerged as the successful bidder at auction with a $19 million purchase price. The court entered the Sale Order on May 20, 2025, approving the transaction free and clear of all liens under section 363(f). The Rhode Island-based company, founded in 1924, operates 13 manufacturing facilities worldwide and specializes in custom compounds and specialty materials. CEO Don Wiseman positioned the acquisition as furthering Teknor's sustainable materials portfolio.

The acquisition included substantially all of Danimer's operating assets: the Kentucky and Bainbridge manufacturing facilities and the company's intellectual property portfolio of more than 480 granted patents and pending applications in over 20 countries. Teknor Apex announced that Danimer would operate as a separate, dedicated entity under its own name within the Teknor organization.

Value Comparison.

The $19 million purchase price represented a decline from prior valuation benchmarks:

From the $890 million valuation at the 2020 SPAC merger to the $19 million sale, the implied decline was 98%. The approximately $380 million in SPAC proceeds were consumed through operating losses and the paused Greenfield facility investment. The $189.5 million invested in the Greenfield expansion did not produce production capacity by the time of sale.

For creditors, the $402 million in total funded debt yielded $19 million in sale proceeds before professional fees and administrative expenses—a recovery of approximately 4.7 cents on the dollar before waterfall distributions.

Chapter 11 Plan of Liquidation

Following the 363 sale closing, the debtors filed a Joint Chapter 11 Plan of Liquidation to wind down the remaining estates and distribute proceeds to creditors according to the Bankruptcy Code's priority scheme.

Plan Timeline.

Classification and Treatment.

The Confirmation Order was entered on July 18, 2025. Administrative claims and priority claims were paid in full as required under the Bankruptcy Code. The Super Senior Bridge lenders (Class 3) received full recovery through the DIP roll-up mechanism that had converted their prepetition claims to superpriority administrative status.

Secured creditors under the IP Term Loan and NMTC facilities (Class 4) faced limited recovery given the sale proceeds after satisfaction of higher-priority claims. The $216.9 million in unsecured convertible notes and other general unsecured claims (Class 5) faced de minimis recovery. Intercompany claims among the debtor entities were cancelled as part of the estates' consolidation, and all equity interests in the debtors were cancelled with no distribution.

Liquidating Trust.

A Liquidating Trust was established on the July 25, 2025 effective date to administer remaining assets, pursue any residual claims, and make distributions to creditors. The Liquidating Trustee assumed responsibility for completing claims reconciliation, adjudicating any disputed claims, monetizing any remaining assets, and making final distributions in accordance with the confirmed plan.

Key Timeline

The case moved from petition to effective date in 129 days.

Professional Retentions

Michael Tung of AlixPartners served as Chief Restructuring Officer, providing the First Day Declaration that outlined the company's background, financial condition, and reasons for filing. The Unsecured Creditors' Committee retained separate counsel and financial advisors to represent the interests of the $216.9 million in convertible noteholders and other unsecured creditors in the sale process and plan confirmation.

SPAC-to-Bankruptcy Context

Danimer Scientific's 2020 SPAC valuation was approximately $890 million, and the company later sold for $19 million in the chapter 11 process.

Projection shortfalls. SPAC mergers require projections to establish enterprise value, but the private company targets have limited operating history to validate those projections. Danimer projected commercial-scale profitability that did not materialize before the filing.

Capital deployment without commercial validation. The approximately $380 million in SPAC proceeds were deployed toward manufacturing expansion before the company had demonstrated the ability to sell PHA biopolymers profitably at scale. The Greenfield facility investment of $189.5 million preceded commercial success needed to support the capacity expansion.

Technology-to-market gap. Danimer's Nodax PHA was the first marine-degradable biopolymer, but production costs remained higher than petroleum-based alternatives, limiting adoption despite customer interest in sustainable packaging.

PHA Market Outlook.

The underlying market for biodegradable plastics continues to grow. According to MarketsandMarkets research, the global PHA market is projected to grow from $123.8 million in 2025 to $265.2 million by 2030, representing a compound annual growth rate of 16.5%. Global PHA production exceeded 35,000 metric tons in 2024, with Europe commanding 57.4% of the market.

Teknor Apex acquired Danimer's operating assets and a portfolio of more than 480 granted patents and pending applications covering PHA and PLA biopolymer technologies. Danimer will operate as a separate, dedicated entity under its own name within the Teknor organization.

Frequently Asked Questions

What caused Danimer Scientific to file bankruptcy? Danimer filed chapter 11 after failing to commercialize its PHA biopolymer technology at profitable scale despite raising approximately $380 million through its 2020 SPAC merger. Revenue declined from $79.5 million in 2022 to $51.8 million in 2024. The company lost $72 million on just $26 million in revenues during the first nine months of 2024. Approximately $189.5 million was stranded in a paused Greenfield facility expansion, and the $402 million debt load proved unsustainable given operating cash flow deficits.

Who acquired Danimer's assets? Teknor Apex Company, a compound manufacturer based in Pawtucket, Rhode Island, acquired substantially all assets for $19 million. The acquisition includes the Kentucky and Bainbridge manufacturing facilities and over 480 granted patents and pending applications in more than 20 countries. Teknor operates 13 manufacturing facilities worldwide and intends to continue Danimer's operations as a separate entity within its organization.

What is Nodax PHA? Nodax is Danimer's proprietary polyhydroxyalkanoate biopolymer derived from plant oils. It was the first PHA certified as marine degradable and is capable of biodegrading in oceans, freshwater, and landfills. The production process uses fermentation with canola oil consumed by soil bacteria. The technology was central to Danimer's product strategy.

What happened to Danimer shareholders? All equity interests were cancelled under the Chapter 11 Plan of Liquidation with zero recovery. The company had been delisted from the New York Stock Exchange before the bankruptcy filing after its market capitalization fell below the $15 million minimum threshold. Shareholders who purchased at the 2020 SPAC merger valuation of approximately $890 million lost their investment.

How long did the bankruptcy case take? The case moved from petition (March 18, 2025) to effective date (July 25, 2025) in 129 days—just over four months. The timeline followed the DIP milestones and sale process.

What happened to the Greenfield expansion? The company invested approximately $189.5 million in a planned 125-million-pound-per-year Greenfield facility before pausing construction in Q4 2024. The $700 million expansion announced in March 2021 was never completed, and the investment became stranded capital that generated no production capacity or value at sale.

Was the securities class action resolved? Yes. The securities class action filed in May 2021 alleging misleading biodegradability claims was dismissed by the Eastern District of New York in 2023. The Second Circuit affirmed the dismissal on September 27, 2024. Three related shareholder derivative cases in Delaware were also dismissed. The company prevailed on the merits and incurred legal costs during the litigation.

How much will creditors recover? Super Senior Bridge lenders received 100% recovery through the DIP roll-up mechanism. Secured lenders under the IP Term Loan and NMTC facilities face limited recovery from the $19 million sale proceeds after higher-priority claims. The $216.9 million in unsecured convertible notes and other unsecured creditors face de minimis recovery.

How many employees lost their jobs? The company reduced its workforce from approximately 170 employees to 82 through a pre-petition reduction in force in February 2025. Additional job losses occurred upon the bankruptcy filing and sale process. Teknor Apex's plans for continued operations as a separate Danimer entity were disclosed, but the extent of retention is not disclosed.

What is the broader PHA market outlook? The global PHA market continues to grow. The market is projected to expand from $123.8 million in 2025 to $265.2 million by 2030 at a 16.5% compound annual growth rate. Global production exceeded 35,000 metric tons in 2024. Europe commands 57.4% of the market.

Who is the claims agent for Danimer Scientific?

Stretto, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

---

For more bankruptcy case analyses and restructuring insights, visit ElevenFlo's bankruptcy blog.