Gamida Cell: Delaware Enforces Israeli Debt Arrangement on $75M Highbridge Swap

Gamida Cell Ltd.'s chapter 15 case produced what its advisers described as the first U.S. recognition and enforcement of an Israeli debt arrangement, a cross-border structure that converted $75 million of Highbridge debt into equity and took the Israeli cell-therapy company private. The arrangement became effective on May 24, 2024, nine days after the Delaware court recognized the foreign proceeding.

Gamida filed its chapter 15 petition on April 22, 2024 in the U.S. Bankruptcy Court for the District of Delaware, lead case number 24-10847, to obtain recognition of a debt arrangement pending before the District Court in Be'er-Sheva, Israel. The substantive reorganization ran through the Israeli court under Part 10 of the country's insolvency law, while Delaware's role was to extend the automatic stay to U.S. assets and enforce the Israeli confirmation order against U.S. creditors. The verified petition and the supporting declaration of CEO Abigail Jenkins set out the company's capital structure, the causes of distress, and the basis for treating Israel as the center of main interests.

Debtor	Gamida Cell Ltd.
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-10847
Judge	Hon. J. Kate Stickles
Petition Date	April 22, 2024
Recognition & Enforcement	May 15, 2024
Effective Date	May 24, 2024
Foreign Proceeding	Israeli debt arrangement under Part 10 of the Insolvency and Economic Rehabilitation Law (Be'er-Sheva District Court, Case No. 63461-03-24)
Debt Converted	$75 million senior notes converted to 100% of reorganized equity
Exit Financing	$49.4 million from Highbridge
Shareholder Consideration	Contingent value rights up to $27.5 million

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Highbridge Debt-for-Equity Swap and CVR Structure

The restructuring was anchored by a restructuring support agreement executed March 26, 2024 among Gamida Cell Ltd., its U.S. subsidiary Gamida Cell Inc., and Highbridge Capital Management. Under the RSA, Highbridge agreed to convert its $75 million of senior notes into all of the reorganized equity, cancel existing shares, and support delisting from Nasdaq. The Jenkins declaration states the board concluded that the Highbridge proposal was the only realistic alternative to an Israeli liquidation proceeding and wind-down.

In exchange for their cancelled shares, existing shareholders received contingent value rights of up to $27.5 million payable on future milestones. Non-Highbridge general unsecured creditors were left unimpaired and paid in the ordinary course, a structure the verified petition presented as preserving going-concern value and paying ordinary creditors in full while handing Highbridge full ownership in return for deleveraging and new capital. The Jenkins declaration states the arrangement had to be approved and become effective on or before May 15, 2024, or the company would likely default, lose the ability to pay general unsecured creditors in full, and face liquidation with liabilities exceeding assets.

Convertible Notes and Innovation Authority Royalties

Gamida's funded debt centered on Highbridge across two instruments. Gamida Cell Inc. had issued $75 million of 5.875% convertible senior notes due 2026, guaranteed by the Israeli parent, and lenders on a 2022 secured facility held authorization for up to $25 million of 7.50% exchangeable first-lien secured notes due 2024, of which about $4.4 million remained outstanding at filing. Wilmington Savings Fund Society served as trustee and agent from Delaware on the U.S.-governed debt documents.

Beyond the funded debt, the company reported approximately $44 million of obligations to the Israel Innovation Authority, repayable through royalties of 3% to 5% of income on products developed with Innovation Law grants. Those grants required Gamida to manufacture relevant products in Israel, a condition the verified petition cited in arguing that the company's operations and assets were concentrated in Israel.

To establish chapter 15 eligibility, the Delaware filings identified U.S. property including ownership of Gamida Cell Inc. stock, a U.S. retainer balance, a Boston office lease guaranteed by the Israeli parent, and U.S.-governed debt documents administered from Delaware. That property base supported the petition under section 109 while the bulk of the company's operations remained in Israel.

Cash Burn and the Failed Strategic Review

The filing followed a multi-year effort to fund commercialization. Gamida was founded in Jerusalem in 1998 and built a nicotinamide-based platform to expand stem cells and natural killer cells, going public on Nasdaq in 2018. Omisirge (omidubicel-onlv) received FDA approval on April 17, 2023 as the first FDA-approved expanded cord blood product, but the Jenkins declaration records only about $1.78 million of revenue in 2023 against an addressable market of fewer than 10,000 stem-cell transplants annually and a net selling price near $300,000 per patient.

Management ran a strategic process beginning when Moelis pursued royalty financing and licensing in July 2020. The Jenkins declaration states the company approached more than 75 strategic investors and 11 royalty investors, and that later review of asset-sale, merger, licensing, distribution, and restructuring alternatives did not yield actionable third-party transactions.

By early 2024 the company was burning about $7 million per month and was nearing the minimum-liquidity covenant under its Highbridge debt. The Jenkins declaration ties the collapse to a 2022 FDA timing setback, a smaller-than-planned 2022 capital raise, a 2023 workforce reduction, and a declining share price that left any near-term equity raise both highly dilutive and too small to close the liquidity gap.

Israeli Part 10 Proceeding and Shareholder Objections

Gamida commenced the Israeli proceeding on March 27, 2024 under Part 10 of Israel's insolvency law, which can bind affected creditors and shareholders when a debt arrangement is approved by the required class majorities — a majority in number and 75% in value — and sanctioned by the district court. The declaration of Israeli counsel Pinni Yaniv describes that framework and the court's authority to confirm the arrangement.

The Israeli process moved on a compressed timetable. The March 27 orders set a preliminary hearing for April 4, which fixed April 30 as the proofs-of-debt deadline, April 18 as the shareholder-objection deadline, May 1 as the creditor-objection deadline, and May 5 as the hearing on approval, according to the Yaniv declaration. The court appointed Ram Levy, CPA, as an independent valuation expert on April 9.

By the April 18 deadline, two shareholder objections had been filed — one on behalf of roughly 50 shareholders — and one shareholder submitted an alternative proposal. The supplemental Yaniv declaration reports that no creditor objections were filed at the May 5 hearing, that the shareholder objections were litigated, and that the court-appointed expert ultimately recommended an improved arrangement with CVRs for shareholders.

The supplemental declaration recites the financial circumstances at the time of the ruling: Highbridge debt totaling about $80 million to $100 million depending on the instrument described in the translated materials, cash burn near $7 million per month, and a projected covenant breach by the end of April 2024. The Israeli court weighed whether Gamida was balance-sheet insolvent, whether separate creditors' and shareholders' meetings were required, and whether the shareholder CVRs had been improved enough to justify approval.

Delaware Recognition, COMI, and Enforcement

The verified petition argued that Israel was Gamida's center of main interests, citing Israeli incorporation and registered office, the Kiryat Gat manufacturing and R&D base, the location of most employees and books and records, and the Innovation Authority grants restricting transfer of know-how. As of March 15, 2024 the company had 143 full-time employees, 99 of them based in Israel.

On May 15, 2024, Judge J. Kate Stickles entered a final order recognizing the Israeli case as a foreign main proceeding, granting section 1520 relief including the automatic stay and additional section 1521 relief enjoining U.S. actions against the debtor and its assets. The order treated the Israeli court's process as the basis for comity and enforcement in the United States.

A separate enforcement order gave the Israeli confirmation order and debt arrangement full force in the United States, permanently enjoined actions inconsistent with the restructuring, approved the conversion of the 2026 senior notes into all of the reorganized equity, and held the CVRs exempt from registration under section 1145. The motion to recognize and enforce had set out the legal basis for that relief.

The cross-border structure paired the parent's chapter 15 recognition with a short chapter 11 case for the U.S. subsidiary, Gamida Cell Inc. Law-firm summaries described the coordinated chapter 15 and chapter 11 approach as a framework for Israeli companies that need U.S. recognition and enforcement of a restructuring governed by Israeli law.

Effective Date, Delisting, and Workforce Reduction

The notice of effective date filed May 24, 2024 stated that the debt arrangement had become effective, and the court entered the order closing the chapter 15 case the same day after finding it fully administered. The case closed nine days after the Delaware recognition and enforcement orders.

Highbridge became the sole equity owner through Ayrmid Limited, a vehicle it established for the purpose, and the company delisted from Nasdaq, taking Gamida Cell private. Israeli coverage reported a 25% workforce reduction and closure of the Jerusalem development center, while the Kiryat Gat production site continued operating.

The financing package totaled $49.4 million, composed of about $30 million of new senior secured term loans, a roll-up of the roughly $4.4 million of secured notes outstanding, and up to $15 million of delayed-draw commitments. Highbridge structured the capital to fund continued commercialization of Omisirge under the new ownership.

In June 2024, Gamida Cell announced new executive leadership under Ayrmid to oversee continued commercialization. By November 2024, Ayrmid entered an exclusive license agreement with BioLineRx Ltd. for APHEXDA (motixafortide), a stem cell mobilization agent for multiple myeloma patients, with a $10 million upfront payment, up to $87 million in commercial milestones, and royalties of 18% to 23%; Highbridge simultaneously made a $9 million equity investment in BioLineRx. In December 2025, Omisirge received a second FDA approval, this time for severe aplastic anemia, under Ayrmid's ownership.

Key Timeline

Date	Event
March 26, 2024	RSA executed among Gamida, Gamida Cell Inc., and Highbridge
March 27, 2024	Israeli Part 10 debt arrangement commenced in Be'er-Sheva
April 4, 2024	Israeli preliminary hearing sets objection and proof-of-debt deadlines; merits hearing set for May 5
April 9, 2024	Israeli court appoints Ram Levy, CPA, as valuation expert
April 18, 2024	Two shareholder objections filed in Israel
April 22, 2024	Chapter 15 petition and supporting declarations filed in Delaware
April 23, 2024	Delaware scheduling order entered for the recognition hearing
May 5, 2024	Israeli approval hearing; expert recommends improved CVR terms
May 15, 2024	Delaware recognizes the foreign main proceeding and enforces the arrangement
May 24, 2024	Effective date; chapter 15 case closed

Frequently Asked Questions

What does Gamida Cell Ltd. do?

Gamida Cell develops cell therapy products using a nicotinamide-based platform to expand stem cells and natural killer cells. Its lead product, Omisirge (omidubicel-onlv), received FDA approval in April 2023 as the first FDA-approved expanded cord blood product for transplant patients.

Why did Gamida Cell file chapter 15?

The parent company restructured through an Israeli debt arrangement, and chapter 15 in Delaware was used to recognize and enforce that proceeding in the United States, extend the automatic stay to U.S. assets, and protect the note-to-equity conversion against U.S. creditor actions. The motion to recognize and enforce outlines the legal basis for the cross-border approach.

What were the headline terms of the Israeli debt arrangement?

Highbridge agreed to convert about $75 million of senior notes into equity, taking 100% ownership. Existing equity was cancelled and replaced with contingent value rights of up to $27.5 million, while other unsecured creditors were left unimpaired and paid in the ordinary course.

What exit financing supported the restructuring?

Highbridge provided a $49.4 million financing package, including roughly $30 million of new senior secured term loans, a roll-up of about $4.4 million of secured debt outstanding, and up to $15 million of delayed-draw commitments.

When was the chapter 15 case filed and when did it end?

The chapter 15 petition was filed on April 22, 2024. The arrangement became effective on May 24, 2024, and the court entered the order closing the case the same day.

Who is the noticing agent for the Gamida Cell chapter 15 case?

Kroll Restructuring Administration LLC serves as the noticing agent. The Delaware scheduling order identifies Kroll's role in distributing notice and maintaining the public case website.

ElevenFlo covers Gamida Cell's parallel chapter 11 prepack separately, along with comparable cross-border proceedings including Casino's chapter 15 recognition of a French restructuring, Afiniti's chapter 15 of a Bermuda restructuring, and Altice France's chapter 15 of a French restructuring.