Gritstone bio filed chapter 11 in the U.S. Bankruptcy Court for the District of Delaware (No. 24-12305) 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 fell short of the pivotal path management had discussed. 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 with 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 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.
Up to $25 million from Future Solution Investments LLC and other lenders
Case Snapshot
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Pipeline Setbacks and the Strategic Alternatives Process
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. Gritstone's phase 2 colorectal vaccine data did not produce the readout management had discussed as a possible route toward a pivotal GRANITE program. By October 2024 the company had started a strategic alternatives process, and 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. On the petition date, the company listed $100 million to $500 million of assets and liabilities and said its cash runway was expected to end by year-end 2024.
Hercules Term Loan and Prepetition Capital Structure
Gritstone's sole prepetition secured creditor was a syndicate led by Hercules Capital under a July 19, 2022 loan and security agreement, a 60-month term loan sized at up to $80 million across five potential tranches. The lender group included Hercules Capital, Inc., Hercules Capital Funding Trust 2022-1, and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company as successor to Silicon Valley Bridge Bank. Hercules Capital served as prepetition agent, and roughly $40 million in principal was outstanding on the petition date. The lenders held first-priority liens across most asset categories — goods, accounts, equipment, inventory, investment property, general intangibles, cash, and deposit accounts — but their collateral excluded the intellectual property itself, reaching only the rights to payment and proceeds from any IP disposition.
Below the secured debt, the first amended disclosure statement estimated roughly $14.6 million of trade and general unsecured claims arising in the ordinary course, while the First Day Presentation projected about $12.5 million in lease-rejection damages and put total estimated funded claims near $60.8 million. On the equity side, Gritstone had 123,179,862 shares of common stock outstanding as of September 30, 2024, against 300 million authorized common shares and 10 million authorized preferred shares, none of which were issued.
New-Money DIP and the Sale Timeline
With the secured position fixed, the debtors turned to new financing. The court entered an interim cash collateral order on October 16, 2024 that limited cash use to an initial budget, capped unfavorable variances at 20% on a rolling four-week basis with weekly variance reporting, and granted the prepetition lenders replacement liens and a professional-fee carve-out. Two weeks later, the debtors sought an up to $25 million DIP facility from Future Solution Investments LLC and other lenders, carrying 9.5% interest paid in kind, a 2% default premium, a six-month maturity, and an initial $7.5 million draw.
The final DIP order entered on November 14, 2024 approved the new money, repaid roughly $18.99 million of prepetition secured obligations, directed about $2.35 million in adequate-protection payments to the prepetition parties, and capped the post-trigger professional carve-out at $200,000 for the debtors' professionals and $80,000 for the committee's. The order also set the sale milestones: a bid procedures order by November 21, a bid deadline by December 4, auctions by December 9, and a sale hearing by December 16. The court approved the full $25 million DIP package that same day.
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.
Three-Buyer Auction and Credit-Bid 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. at a $1.8 million backup bid rather than the party listed in the earlier notice. The auction record also reflected competitive but unsuccessful interest in the operating platform: NEC Bio, B.V. stood as the $16 million backup bidder for the "Vector" assets, while Seattle Project held backup positions on the "Edge" assets at $5 million and the Binder IP at $1.25 million. 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.
Second Modified Plan and Liquidating Trust Settlement
Before the plan was finalized, the committee filed to challenge the validity of Hercules' secured claim, arguing that after Hercules credit-bid its collateral at auction, the remaining $43.8 million in prepetition secured debt was no longer supported by any remaining collateral and should be treated as an unsecured deficiency claim. That dispute shaped the global settlement that produced the final plan structure.
The Second Modified Plan and the committee's support statement described a global 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 effective-date 8-K said the plan went effective on April 4, 2025.
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.
Oracle America raised the other notable confirmation objection. In a limited objection filed March 17, 2025, Oracle argued that its NetSuite subscription agreements were slated for rejection even though the debtors continued using the software, and that the contracts had to be assumed and cured under section 365, with cure arrearages of at least $19,451.18. The dispute was resolved consensually when the Oracle agreement was added to the schedule of assumed contracts in the first amended plan supplement on March 21, 2025.
Class Treatment and Creditor Recoveries
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 2 other secured claims
Unimpaired; cash, return of collateral, reinstatement, or other agreed treatment
Class 3 secured tax claims
Quarterly principal-and-interest payments over five years, with liens retained until paid
Class 4 priority non-tax claims
Paid in full; no creditors held claims in the class at tabulation
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 7 subordinated claims
No distribution; subordinated under section 510
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 most recent post-confirmation report, covering the quarter ended March 31, 2026, showed Class 5 holding $1,261,063 in cumulative payments on $29,965,776 of allowed claims, or about 4%, with no further Class 5 distribution made that quarter. Administrative claims of $2,336,848 and secured claims of $17,501,163 had been paid in full, and cumulative cash disbursements since the effective date stood at $21,434,694. The effective-date 8-K said all outstanding common stock and other equity interests were canceled on April 4, 2025. Management said on the petition date that it 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.
Post-Effective Administration and Final Fee Awards
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 first extended the claims objection deadline to March 30, 2026, then granted a further 180-day extension to September 28, 2026, with the trustee reserving the right to seek more time to finish claims reconciliation and the investigation of estate litigation claims. The trustee filed the claims register on April 9, 2026.
Post-confirmation administration also included asset-transfer and claims cleanup. The motion to assume and assign the Genevant licenses addressed three agreements — covering HIV, COVID-19, and multi-pathogen fields — that gave Gritstone access to Genevant's lipid nanoparticle technology and had to be transferred to Seattle Project after the sale closed; the debtors argued the contracts' own terms permitted assignment to a buyer of substantially all related assets without Genevant's consent, and the matter was resolved by stipulation in October 2025. Separately, reclamation disputes with the Fisher Entities were settled: Fisher Scientific's $27,060.78 reclamation claim was reclassified as a general unsecured claim, bringing its allowed unsecured total to $99,568.71, while Life Technologies' $24,893.75 reclamation claim was likewise reclassified, with both parties' section 503(b)(9) priority claims having been paid in full during the case.
The estate also clarified directors-and-officers coverage. Certain Lloyd's of London underwriters subscribing to Policy No. B0146ERUSA2301072 obtained a stipulated order in November 2025 authorizing advancement and reimbursement of defense costs for insured directors and officers, with any such payments reducing the policy's limits of liability unless repaid and not treated as estate property. Separately, a federal court dismissed a shareholder lawsuit against Gritstone's executives in July 2025, ruling that investors had not established that the CEO intentionally misled them about COVID-19 vaccine manufacturing issues.
The omnibus final fee order approved about $10.5 million in total professional compensation. Largest allocations. Pachulski Stang Ziehl & Jones, as debtors' counsel, received $3.17 million; Raymond James, as investment banker, $2.52 million; and PwC, as financial advisor, $2.02 million. On the committee side, ArentFox Schiff collected $962,580, FTI Consulting $872,198, and Potter Anderson & Corroon $287,604, while Fenwick & West took $628,225 as special corporate counsel and Verita Global about $27,655 as administrative advisor. 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 the trustee projected a final decree application by June 1, 2026.
Key Timeline
Date
Event
October 10, 2024
Gritstone bio filed chapter 11 in Delaware (No. 24-12305)
October 16, 2024
Interim cash collateral order entered; Verita Global appointed claims and noticing agent
Successful bidders designated across three asset packages
December 20–23, 2024
Hercules and Seattle Project sale orders entered
March 31, 2025
Second Modified Plan filed
April 3, 2025
Confirmation order entered
April 4, 2025
Plan effective; equity cancelled
May 29, 2025
Omnibus final fee order entered
October 2025
Genevant license, Fisher, and Life Technologies disputes resolved by stipulation
April 15, 2026
Claims objection deadline extended to September 28, 2026
June 1, 2026
Final decree application anticipated
Key Timeline
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 post-confirmation reports showed about 4% had been paid by the quarter ended March 31, 2026.
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.
Who is the claims agent for Gritstone bio?
Verita Global serves as the claims and noticing agent, appointed at the start of the case. The trustee filed the claims register on April 9, 2026, and the court extended the claims objection deadline to September 28, 2026.
stipulated order /documents/6c170608-9175-4cab-a8fa-6f33da9a7984/
omnibus final fee order /documents/c5bbebfa-1af8-4f3e-b502-6d119569d517/
BARDA-backed COVID study was delayed https://www.fiercepharma.com/manufacturing/gritstones-barda-funded-covid-vaccine-study-will-get-late-start-date-manufacturing
fell short of the pivotal path management had discussed https://www.fiercebiotech.com/biotech/gritstone-ground-down-phase-2-cancer-vaccine-fail-sparking-race-against-cash-gather-more
plan effective date https://www.sec.gov/Archives/edgar/data/1656634/000119312525073396/d916691d8k.htm
possible pivotal path for GRANITE https://www.precisionmedicineonline.com/precision-oncology/gritstone-bio-eyes-pivotal-trial-personalized-cancer-vaccine-early-ctdna
strategic alternatives process https://www.fiercebiotech.com/biotech/cash-strapped-gritstone-starts-search-strategic-alternatives-cancer-vaccine-data-underwhelm
through a chapter 11 process https://www.precisionmedicineonline.com/precision-oncology/gritstone-files-chapter-11-bankruptcy
listed $100 million to $500 million of assets and liabilities https://www.bloomberg.com/news/articles/2024-10-10/covid-shot-maker-gritstone-bio--grts--files-for-chapter-11-bankruptcy
full $25 million DIP package https://www.law360.com/bankruptcy-authority/articles/2260373/gritstone-bio-can-tap-25m-new-dip-as-it-works-toward-sale
tracked the same split outcome https://news.bloomberglaw.com/bankruptcy-law/bankrupt-shot-maker-gritstone-sells-assets-to-hercules-others
filed to challenge the validity of Hercules' secured claim https://news.bloomberglaw.com/bankruptcy-law/bankrupt-gritstones-creditors-ask-to-kill-hercules-secured-claim
while seeking a buyer https://www.fiercebiotech.com/biotech/gritstone-files-bankruptcy-hope-keeping-cancer-vaccine-rd-afloat
dismissed a shareholder lawsuit against Gritstone's executives https://news.bloomberglaw.com/securities-law/gritstone-bio-executives-escape-investors-covid-vaccine-suit
leadership changes after the sale https://www.tipranks.com/news/company-announcements/gritstone-bio-completes-asset-sale-amid-bankruptcy
court approves DIP and sets auction milestones https://news.bloomberglaw.com/bankruptcy-law/bankrupt-gritstone-covid-shot-maker-to-hold-auction-next-month
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. See the disclaimer.