Gritstone bio: $21.25M Sale and Hybrid Emergence
Gritstone bio entered chapter 11 after clinical and funding setbacks, sold its main assets for $21.25 million, and confirmed a plan that left a reorganized debtor plus a liquidating trust.
In this article
Gritstone bio filed chapter 11 in Delaware on October 10, 2024 after a year in which a BARDA-backed COVID study was delayed, the company announced a 40% workforce reduction, and phase 2 colorectal cancer data underwhelmed expectations. The case began as a sale process funded by cash collateral and a new-money DIP, but the plan that became effective in April 2025 left a reorganized debtor holding retained intellectual property and new equity for the DIP group while a liquidating trust took over creditor recoveries and estate causes of action.
The First Day Declaration described a clinical-stage biotech with 130 employees, operations in Emeryville, Boston, and Pleasanton, and a capital structure led by roughly $40 million of Hercules debt. The First Day Presentation showed a pipeline that still included GRANITE, SLATE, CORAL, HIV, and HPV programs even as the company ran out of time to fund them through commercialization. By the plan effective date on April 4, 2025, Seattle Project Corp. had bought the main asset package for $21.25 million, Hercules and Future Solution Investments had taken narrower asset packages through credit bids, unsecured creditors had been routed into a liquidating trust, and old equity had been canceled.
| Debtor(s) | Gritstone bio, Inc. |
| Court | U.S. Bankruptcy Court, District of Delaware |
| Case Number | 24-12305 |
| Judge | Hon. Karen B. Owens |
| Petition Date | October 10, 2024 |
| Confirmation Date | April 3, 2025 |
| Effective Date | April 4, 2025 |
| DIP Facility | Up to $25 million |
| Main Asset Sale | Seattle Project Corp., $21.25 million |
| Plan Structure | Reorganized debtor plus liquidating trust |
What drove the filing
Gritstone entered chapter 11 as a research-stage company developing personalized and off-the-shelf vaccines and immunotherapies for oncology and infectious disease, with manufacturing and development infrastructure already in place. Earlier in 2024 the company was still highlighting EDGE platform improvements and discussing a possible pivotal path for GRANITE. During 2024, a manufacturing-related delay pushed back the BARDA-backed CORAL study, and a 40% reduction in force followed in February.
The oncology pipeline also lost momentum. Fierce Biotech reported that Gritstone's phase 2 colorectal vaccine data failed to deliver the readout management needed to keep pushing GRANITE toward a pivotal path. By October 2024 the company had started a strategic alternatives process, and Precision Medicine Online reported that management was considering transactions ranging from financing to a sale while still trying to preserve cancer-vaccine research through a chapter 11 process.
The First Day Declaration said Gritstone still held about $40 million of cash, cash equivalents, and marketable securities as of August 31, 2024, but did not have enough capital to support its programs through commercialization. The same declaration said Raymond James had been retained before bankruptcy to explore financing and sale options and that discussions with the Hercules lending group did not produce an out-of-court solution. Bloomberg's filing-day coverage added that the company listed assets and liabilities each between $100 million and $500 million and expected its cash runway to end by year-end 2024.
How the chapter 11 case was financed and timed
Hercules Capital and related lenders held the prepetition secured position under a 2022 term loan, and the court entered an interim cash collateral order on October 16, 2024 to govern liquidity while the debtors prepared a broader financing package. Two weeks later, the debtors sought an up to $25 million DIP facility from Future Solution Investments LLC and other lenders. The proposed facility carried 9.5% interest paid in kind, a 2% default premium, and an initial $7.5 million draw.
The final DIP order entered on November 14, 2024 approved new money, repaid roughly $18.99 million of prepetition secured obligations, directed adequate-protection payments to the prepetition parties, and set sale milestones. The order required a bid procedures order by November 21, a bid deadline by December 4, auctions by December 9, and a sale hearing by December 16. Law360's DIP approval coverage separately reported approval of the $25 million financing package.
The court's bid procedures order set the formal marketing and auction rules for a process that had no stalking horse at the outset. The case moved from filing to auction in about two months.
How the asset sale was split
The auction did not produce a single-buyer outcome. The Auction Results Notice filed after a four-day auction on December 9 through 12, 2024 split the asset package across three buyers, combining one cash deal with two credit bids.
| Asset package | Buyer | Consideration |
|---|---|---|
| Machinery and equipment | Hercules Capital, as agent | $3.0 million credit bid |
| Binder IP | Future Solution Investments LLC | $1.5 million credit bid |
| All other assets | Seattle Project Corp. | $21.25 million cash |
| Total aggregate value | Approximately $25.75 million |
The Supplemental Auction Results Notice later corrected the backup bidder for the machinery-and-equipment lot, naming Tiger Capital Group LLC and Liquidity Services, Inc. rather than the party listed in the earlier notice. Investing.com's auction report and later sale-completion report tracked the same split between Seattle Project's cash purchase and the lenders' credit bids.
The court entered a sale order for the Hercules APA on December 20 and a separate sale order for the Seattle Project transaction on December 23. Bloomberg Law's auction coverage tracked the same structure: secured lenders used credit bids to take equipment and specified IP, while Seattle Project bought the broader operating asset package.
What the confirmed plan actually did
The Second Modified Plan and the committee's support statement described a settlement under which the reorganized debtor retained specified intellectual property and issued new equity to the DIP constituency, while a liquidating trust took trust funding, causes of action, and responsibility for unsecured-creditor recoveries.
DIP financing claims received $16.725 million in cash and converted $5.375 million into new equity interests in the reorganized debtor. The liquidating trust received a $2.05 million initial distribution, made up of the $350,000 convenience-claims cap and $1.7 million earmarked for the first Class 5 distribution. The Confirmation Order approved that structure on April 3, 2025, and the SEC 8-K reporting the effective date and equity cancellation confirmed that the plan went effective the next day.
Before confirmation, the U.S. Trustee challenged the third-party release and injunction language in its objection to the amended disclosure statement, arguing that an accepting creditor's failure to opt out should not be treated as consent. The debtors responded by narrowing the record around affirmative acceptance and opt-out mechanics, and the Confirmation Order found the release structure consensual as applied to creditors that voted to accept and did not opt out.
What creditors and equity received
The Tabulation Declaration shows that every class with ballots cast accepted the plan. Hercules submitted the sole Class 1 ballot in the amount of $43,838,427.50, JPL Investments Corp. cast the sole Class 3 ballot for $3,101.15, and both Class 5 and Class 6 accepted through 25 ballots each. Class 5 ballots totaled $27,016,699.35, and Class 6 ballots totaled $344,326.71.
The key class outcomes were:
| Class | Confirmed treatment |
|---|---|
| Class 1 prepetition secured claims | $400,000 cash if the class accepted and did not contest confirmation, with any remaining allowed deficiency treated in Class 5 |
| Class 5 general unsecured claims | 100% of liquidating trust interests plus the $1.7 million initial Class 5 distribution, subject to reserves for disputed claims |
| Class 6 convenience claims | Up to 20% cash, capped by the $350,000 convenience-claims pool |
| Class 8 equity interests | Cancelled and discharged with no recovery |
The committee's support statement projected roughly 4% to 5% initial cash for Class 5 plus litigation upside, and the Q4 2025 post-confirmation report showed that Class 5 had received $1,261,063 on $29,965,776 of allowed claims, or about 4%, by year-end 2025, while administrative and secured claims had been paid in full. The same SEC filing that announced plan effectiveness said all outstanding common stock and other equity interests were canceled on April 4, 2025. Fierce Biotech's filing-day report said management was using chapter 11 to preserve cancer-vaccine research while seeking a buyer.
The plan released section 547 preference actions against trade creditors, subject to carve-outs for fraud, criminal conduct, gross negligence, or willful misconduct.
What stayed open after plan effectiveness
Plan effectiveness did not end the case. A motion filed by Liquidating Trustee Thomas A. Pitta in September 2025 said the reorganized debtor no longer needed the case to remain open and that the trustee would handle future reports, claims reconciliation, and U.S. Trustee fees. The court later extended the claims objection deadline to March 30, 2026.
Post-confirmation administration also included asset-transfer cleanup. The motion to assume and assign the Genevant licenses shows that three Genevant agreements tied to lipid nanoparticle technology still had to be transferred to Seattle Project after the sale closed. Separate disputes with Fisher Scientific and Life Technologies over reclamation claims were resolved by stipulation, with the disputed reclamation amounts reclassified as general unsecured claims.
The omnibus final fee order approved about $10.5 million across Pachulski Stang Ziehl & Jones, Raymond James, PwC, Fenwick & West, Verita, ArentFox Schiff, Potter Anderson, and FTI Consulting. Public disclosures also reflected leadership changes after the sale, with co-founder and CEO Andrew Allen leaving at year-end 2024 and Vassiliki Economides remaining to oversee the wind-down. The Q4 2025 report said cumulative professional fees paid had reached $10,502,345 and projected a final decree application by June 1, 2026.
Frequently Asked Questions
Did Gritstone liquidate or reorganize?
Both. The company sold most operating assets in December 2024, but the effective-date 8-K confirms that the plan left a reorganized debtor holding retained IP and new equity for the DIP group while a liquidating trust handled unsecured-creditor recoveries and estate claims.
Who bought Gritstone's assets in chapter 11?
Seattle Project Corp. bought the main asset package for $21.25 million. Hercules Capital took machinery and equipment with a $3 million credit bid, and Future Solution Investments took Binder IP with a $1.5 million credit bid.
What did unsecured creditors recover?
Class 5 general unsecured creditors received liquidating trust interests and the $1.7 million initial Class 5 distribution, subject to disputed-claim reserves. The committee projected about 4% to 5% initial cash plus litigation upside, and the Q4 2025 post-confirmation report showed about 4% had been paid by year-end 2025.
What happened to Gritstone's equity?
Old equity was canceled on the April 4, 2025 effective date. The reorganized debtor's new equity went to the DIP constituency under the confirmed plan.
For more chapter 11 case coverage, see ElevenFlo's bankruptcy blog.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.