Invitae: NVTA Stock and $239M Labcorp Sale

Invitae Corporation sold its medical-genetics business to Labcorp Genetics Inc. as a going concern for roughly $239 million in cash in a competitive auction, then distributed the proceeds under a liquidating plan that paid secured noteholders an estimated 91% to 94.8% while leaving roughly $1.18 billion in parent-level convertible notes with nothing. The recovery split traces to a prepetition note exchange that converted Deerfield Partners and other holders from unsecured to secured status — a transaction the unsecured creditors' committee challenged as a fraudulent conveyance and is still litigating at the U.S. Court of Appeals for the Third Circuit. Invitae filed chapter 11 on February 13, 2024 in the U.S. Bankruptcy Court for the District of New Jersey (Case No. 24-11362) before Judge Michael B. Kaplan, supported by a transaction support agreement with its senior secured noteholders, and emerged from a confirmed plan less than six months later.

What has changed in Invitae Corporation since this article was published?

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Debtor(s)	Invitae Corporation (lead debtor, jointly administered affiliates)
Court	U.S. Bankruptcy Court, District of New Jersey
Case Number	24-11362
Judge	Hon. Michael B. Kaplan
Petition Date	February 13, 2024
Funded Debt at Filing	~$1.482 billion
Financing	Consensual cash collateral (no DIP)
Auction Date	April 17, 2024
Sale Order Date	May 7, 2024
Buyer	Labcorp Genetics Inc. (~$239 million cash)
Confirmation Date	August 2, 2024 (Third Amended Joint Plan)
Effective Date	August 7, 2024

Debt-Fueled Acquisitions and the Liquidity Covenant Breach

Invitae described itself in the First Day Declaration of Chief Financial Officer Ana Schrank as a medical-genetics company spanning four business lines: hereditary cancer testing, rare-disease genetic testing, personalized cancer monitoring (minimal residual disease detection), and a data-products business that aggregated and de-identified patient data for clinicians, biopharmaceutical companies, and researchers. The company employed approximately 1,562 people globally at the petition date and had 291.1 million shares of common stock outstanding, with SoftBank Group and Cathie Wood's ARK Investment Management among its largest holders.

The filing followed a debt-fueled expansion that the company could not sustain once demand cooled. Between 2019 and 2021, Invitae completed thirteen acquisitions, including ArcherDX, and built total debt obligations to approximately $1.482 billion. Schrank's declaration attributed the distress to a combination of that leverage, a sharp post-pandemic decline in DNA-testing demand, a falling share price that closed off equity financing, turnover in four chief financial officers in the two years before the filing, and continued cash burn even after a 2022 realignment that cut roughly 1,000 jobs and exited operations in about 100 countries. The DNA-testing sector struggled to regain investor interest after the pandemic-era boom, and MedTech Dive reported the company was burning about $9 million to $10 million per month at filing.

Beginning in 2022, Invitae tried to shrink. It divested ArcherDX's somatic assets in 2022, sold YouScript platform assets to Aranscia, LLC in November 2023, wound down its Ciitizen business by December 2023, and in January 2024 signed an agreement to sell Women's Health assets to Natera, Inc.. The declaration credited those wind-downs with roughly $140 million in annualized cash savings. The immediate trigger for the filing was a covenant: absent chapter 11, Invitae would have breached the $150 million minimum-liquidity covenant in its 2028 senior secured notes indenture, a covenant the consenting secured noteholders expressly declined to waive.

Capital Structure and the 2028 Senior Secured Notes Exchange

Invitae carried three principal debt instruments into bankruptcy, totaling about $1.482 billion. Only one of the three was secured.

Instrument	Status	Rate	Maturity	Principal
2028 Convertible Senior Secured Notes	Secured	4.50%	March 15, 2028	$305.4 million
2024 Convertible Senior Unsecured Notes	Unsecured	2.00%	September 1, 2024	$27.1 million
2028 Convertible Senior Unsecured Notes	Unsecured	—	April 1, 2028	$1,150.0 million

The 2028 senior secured notes were created through two prepetition exchanges that later became the most contested issue in the case. In the March 2023 exchange, Invitae issued $275.3 million of Series A notes and $30 million of Series B notes under a new March 7, 2023 indenture, exchanging out existing unsecured notes and converting Deerfield Partners and certain other creditors from unsecured to secured status. An August 2023 exchange added a small amount of further Series A notes through a first supplemental indenture. The secured notes were backed by liens on substantially all assets of Invitae and its domestic material subsidiaries plus a pledge of subsidiary equity, with U.S. Bank Trust Company, National Association serving as trustee and collateral agent. Roughly $1.177 billion of 2024 and 2028 convertible notes remained unsecured at the parent level.

In the months before filing, Invitae layered on additional steps toward a sale: it formed a special committee of the board in September 2023, retained Kirkland & Ellis, Moelis & Company, and FTI Consulting as restructuring advisors, secured noteholder consent to wind down the Ciitizen, Women's Health, and YouScript lines in December 2023, and commenced a third-party marketing process on December 14, 2023. A series of supplemental indentures extended restructuring milestones into early 2024.

Transaction Support Agreement and Cash Collateral

Invitae filed alongside a transaction support agreement executed on the petition date with its consenting senior secured noteholders. Under the agreement, the noteholders committed to support the sale process, vote in favor of the joint plan, allow consensual use of cash collateral, and — notably — allocate sale proceeds to subsidiary general unsecured creditors and administrative expenses before taking their own recovery. Deerfield also negotiated the right to credit bid in the auction, a provision the court later credited with driving the eventual purchase price higher.

The Debtors did not seek debtor-in-possession financing. The case ran entirely on cash collateral. The cash collateral motion required weekly or bi-weekly reporting to the secured parties, capped negative variance on total receipts and total disbursements at 12.5% for each test period, and set a minimum-liquidity threshold of $56.7 million. The court entered an interim order on February 16, 2024 and a final order on March 18, 2024 granting the noteholders superpriority claims and replacement liens on substantially all assets as adequate protection.

The cash collateral package drew objections. The official committee of unsecured creditors objected to final approval, arguing the adequate-protection package was overbroad and that proposed waivers of the committee's rights were improper, and MassMutual Asset Finance filed a limited objection and reservation of rights. Deerfield Partners and U.S. Bank Trust Company filed a joint response supporting approval, and the court entered the final order on March 18, 2024 over the committee's objection.

Auction and the $239 Million Labcorp Sale

The bidding procedures order, entered February 16, 2024, set an April 17, 2024 auction, an April 29 sale-objection deadline, and a May 6 sale hearing. The procedures allowed for a stalking-horse designation with bid protections, but none was named upfront; Labcorp prevailed in open bidding rather than as a protected stalking horse. Reuters reported that Labcorp won the auction with a $239 million cash bid, and Fierce Biotech noted the deal added oncology and rare-disease testing to Labcorp's genetic specialty business. Labcorp estimated annual revenue of $275 million to $300 million from the acquired assets.

At the sale hearing, Judge Kaplan found the auction "effective and rigorous" and observed that this was "not a situation where the stalking horse bidder prevailed," deferring to the Debtors' business judgment and finding the consideration ample and reasonable. The court entered the sale order on May 7, 2024. Beyond the cash price, Labcorp agreed to collect and remit accounts receivable existing at closing for the benefit of the estates under a reverse transition services arrangement; FTI Consulting's confirmation declaration valued total sale proceeds at approximately $242.3 million. The transaction was structured as a going-concern sale of substantially all assets and employees, with assumption and assignment of a large number of executory contracts and unexpired leases at Labcorp's expense. Labcorp finalized the acquisition on the August 7, 2024 effective date.

Advisors and a Kirkland conflict fight. Invitae retained Kirkland & Ellis as lead counsel, Cole Schotz as co-counsel, Moelis & Company as investment banker, and FTI Consulting as administrative advisor; Labcorp engaged Citi as financial advisor with Hogan Lovells and Kilpatrick Townsend as counsel. The U.S. Trustee's office opposed Invitae's retention of Kirkland, and the committee raised concerns about the firm's prior representation of Deerfield. The Bankruptcy Court permitted Kirkland to continue as Debtors' counsel in a May 2024 memorandum decision, overruling the objections from both the U.S. Trustee and the committee.

Liquidating Plan and Creditor Recoveries

After the sale, the Debtors moved to a liquidating chapter 11 plan to distribute the proceeds. The plan went through several iterations — an original joint plan filed May 9, 2024, a disclosure statement approved June 13, 2024, and second and third amended versions filed in July and August 2024. Judge Kaplan told the parties in late July that the plan needed adjustments before he would confirm it. The court entered the confirmation order approving the Third Amended Joint Plan on August 2, 2024, and the plan went effective on August 7, 2024.

The plan's class treatment divided recoveries between secured and parent-level unsecured creditors:

Class	Claims / Interests	Status	Projected Recovery
Class 1	Other Secured Claims	Unimpaired	100%
Class 2	Other Priority Claims	Unimpaired	100%
Class 3	2028 Senior Secured Notes ($305.4M)	Impaired	91.0%–94.8%
Class 4	Convenience Class Claims	Unimpaired	100%
Class 5	Subsidiary Unsecured Claims	Unimpaired	100%
Class 6	Parent Unsecured Claims (~$1.177B)	Impaired	0%
Class 9	Section 510(b) Claims	Impaired	0%
Class 10	Equity Interests	Impaired	0%

According to FTI's confirmation declaration, the estates held roughly $242.3 million in sale proceeds plus about $96.3 million in cash and equivalents, against a $12.9 million wind-down reserve, $64.8 million in administrative and priority claims, and a $17.2 million convenience/general-unsecured reserve, leaving approximately $243 million in distributable value. About $240 million was distributed to Class 3 senior secured noteholders on the effective date. Because the TSA had subordinated the secured noteholders' recovery to subsidiary unsecured creditors and administrative costs, Class 5 subsidiary unsecured claims were paid in full while Class 6 parent-level unsecured notes — roughly $1.177 billion of 2024 and 2028 convertible notes — received nothing, and existing equity was cancelled. Class 3 was the only impaired class entitled to vote, and it voted to accept the plan.

Releases and the gatekeeper provision. The confirmed plan included third-party releases with opt-out procedures over objections from the U.S. Trustee and the committee, both of which challenged the breadth of the releases. The technical-modifications confirmation order included a gatekeeper provision requiring any entity that opted out of the releases to obtain a final order from the Bankruptcy Court before suing a released party, and the court upheld the exculpation provisions as appropriately tailored, with carve-outs for actual fraud, willful misconduct, and gross negligence.

Professional fees. The court approved approximately $60.2 million in professional fees. Debtor professionals were awarded about $39.3 million under an October 11, 2024 final fee order, led by Kirkland & Ellis at $20.1 million, Moelis at $12.2 million, and FTI at $6.1 million. Committee professionals were awarded about $20.9 million under an October 16, 2024 order, led by White & Case at $13.6 million, with Ducera Partners and Province each above $3 million.

Committee Standing Fight and the Third Circuit Appeal

The defining contested matter was the committee's effort to undo the prepetition note exchanges. The official committee of unsecured creditors moved for leave and standing to prosecute fourteen causes of action on the estates' behalf, seeking to avoid both the March 2023 and August 2023 exchanges as constructive and actual fraudulent conveyances, to recover bonus payments and consent fees, and to pursue breach-of-fiduciary-duty claims against Invitae's directors and officers. Avoiding the exchanges would have stripped Deerfield of its secured status and reordered the entire distribution.

Deerfield argued the March exchange was a reasonable and necessary response to Invitae's looming 2024 maturities and pointed to its contributions in the case — entering the TSA, enabling consensual cash collateral, and exercising a credit-bid right the court found drove Labcorp to raise its bid by roughly $59 million. Judge Kaplan denied the standing motion from the bench at the July 22-23, 2024 confirmation hearing, and the court entered a formal order denying standing on August 2, 2024, the same day it confirmed the plan.

The committee appealed both the standing order and the confirmation order to the U.S. District Court for the District of New Jersey. On August 11, 2025, the District Court affirmed both orders. The committee then filed a notice of appeal to the Third Circuit on September 5, 2025, with the record transmitted September 11-12, 2025. The appeal — which targets both the denial of derivative standing and the plan's release provisions — remained pending as of mid-2026.

Post-Confirmation Administration and Pending Disputes

The case has stayed in post-effective-date wind-down. The plan administrator has prosecuted claim objections through at least a fifth omnibus objection, with a supplemental order sustaining that objection entered January 7, 2026 and a further extension of the claim-objection deadline entered February 2, 2026. Cumulative cash disbursements since the effective date reached about $148.8 million through the quarter ended March 31, 2026, up from roughly $145.5 million at year-end 2025, with cumulative professional fees of about $60.2 million. The plan administrator's anticipated date for seeking a final decree is June 30, 2027, and further creditor recoveries depend on receivables collection, retained causes of action, and resolution of the committee appeal.

Two disputes remain open. Natera, the prepetition counterparty on the Women's Health asset agreement, filed an adversary complaint in January 2025 seeking a declaration that Invitae rejected the agreement so that Natera owed no contingent milestone payment, and asking the court to let a parallel Delaware Chancery action proceed. The Bankruptcy Court allowed the Delaware contract fight to go forward, and a related Delaware patent dispute saw Natera's award against Invitae adjusted in April 2026. Separately, Humana entities filed a motion to compel payment of a chapter 11 administrative-expense claim that the plan administrator has repeatedly sought to adjourn; the court most recently adjourned the hearing to June 25, 2026 while the parties negotiate.

Key Timeline

The case timeline runs from Invitae's 2019-2021 acquisition program and 2023 note exchanges through the August 2024 plan effective date and the committee's September 2025 Third Circuit appeal.

Date	Event
2019–2021	Thirteen acquisitions, including ArcherDX
July 18, 2022	Strategic realignment; ~1,000 layoffs; exit ~100 countries
March 2023	March exchange creates 2028 senior secured notes
August 22, 2023	August exchange (first supplemental indenture)
December 14, 2023	Third-party marketing process commenced
February 13, 2024	Chapter 11 petition filed; TSA executed
February 16, 2024	Interim cash collateral and bidding procedures orders entered
March 18, 2024	Final cash collateral order entered
April 17, 2024	Auction held
April 25, 2024	Labcorp named winning bidder
May 7, 2024	Sale order entered approving Labcorp sale
June 13, 2024	Disclosure statement approved
August 2, 2024	Confirmation order and order denying committee standing entered
August 7, 2024	Effective date; sale closes
August 11, 2025	District Court affirms standing and confirmation orders
September 5, 2025	Committee appeals to the Third Circuit
June 30, 2027	Anticipated final-decree application date

Frequently Asked Questions

Who bought Invitae's assets and for how much?

Labcorp Genetics Inc. acquired Invitae's genetic-testing services, digital-health solutions, and data-services business as a going concern for approximately $239 million in cash at an April 17, 2024 auction. FTI's confirmation declaration later valued total sale proceeds, including post-closing accounts-receivable collection, at about $242.3 million.

Why did parent-level noteholders recover nothing?

The sale proceeds were distributed under a liquidating plan that paid Class 3 senior secured notes an estimated 91.0% to 94.8% (about $240 million) after the senior noteholders agreed to fund subsidiary unsecured creditors and administrative costs first. Under the confirmed plan economics, Class 6 parent unsecured claims — roughly $1.177 billion of 2024 and 2028 convertible notes — and existing equity received nothing.

What is the dispute over the 2023 note exchanges?

The unsecured creditors' committee sought standing to challenge Invitae's March and August 2023 note exchanges, which converted Deerfield Partners and others from unsecured to secured status, as fraudulent conveyances. The Bankruptcy Court entered the order denying standing on August 2, 2024, the District Court affirmed on August 11, 2025, and the committee's appeal to the Third Circuit remained pending in mid-2026.

Did Invitae use debtor-in-possession financing?

No. The case was funded entirely through consensual use of cash collateral under the transaction support agreement, subject to a $56.7 million minimum-liquidity floor, a 12.5% negative-variance limit on receipts and disbursements, and superpriority adequate-protection liens for the secured noteholders.

When did Invitae file, and where is the case pending?

Invitae filed chapter 11 on February 13, 2024 in the U.S. Bankruptcy Court for the District of New Jersey (Case No. 24-11362) before Judge Michael B. Kaplan. The confirmation order was entered August 2, 2024, and the plan went effective August 7, 2024.

Who is the claims agent for Invitae?

Kurtzman Carson Consultants, LLC dba Verita Global serves as the claims and noticing agent, maintaining the official claims register through the case's ongoing post-confirmation claim-objection process.

For related coverage of genetics, diagnostics, and biotech restructurings, see ElevenFlo's analysis of 23andMe's chapter 11 and $305M nonprofit sale, Accelerate Diagnostics' 97-day credit-bid sale, and Acorda Therapeutics' $185M stalking-horse sale and liquidating plan.

Ask our AI chat to review the Invitae docket, including the key filings, orders, and deadlines behind this case. For full docket research tools and workflow coverage, review ElevenFlo's plans and pricing.

Sources

1. First Day Declaration /documents/2f7132c0-09cb-4277-b224-b583a48783af/
2. totaling about $1.482 billion /documents/4dd3fea6-5119-4a8e-85f8-77e0bb69e43f/
3. cash collateral motion /documents/e14922dc-8927-44e4-93e3-789ac98163e1/
4. interim order /documents/4aca9ad6-e351-4de7-b1d3-cf3d1a95486a/
5. final order /documents/58632a43-2dfc-4495-8370-5ea616306adb/
6. bidding procedures order /documents/a409c35b-70c2-497d-8b03-613db4f30c69/
7. sale order /documents/a2864c27-afc2-4387-a62a-314a6dac60e1/
8. joint plan /documents/ea769b87-04d3-4671-a152-59fc0dd4a6af/
9. disclosure statement /documents/7fa356da-5f6a-475c-84df-ebeba53d72ad/
10. confirmation order /documents/3dce0c3f-606e-417b-9d17-271935868779/
11. confirmation declaration /documents/13739b23-979d-4d59-964c-71b7ab96d8ff/
12. technical-modifications confirmation order /documents/b9ead1e9-4f2c-4b5d-824a-235d9f95abca/
13. October 11, 2024 final fee order /documents/b89c9860-c416-47b1-91e5-164410c9c534/
14. October 16, 2024 order /documents/99ce8a21-cb0b-40eb-9a80-031c010b693b/
15. order denying standing /documents/2faf6351-d7e9-47e1-bcf5-83cb6c0ac8b5/
16. affirmed both orders /documents/3ce1487a-97b2-4864-808a-72f90daf5fd5/
17. further extension of the claim-objection deadline /documents/b97f674e-7715-466d-b0d9-c6156851283e/
18. $148.8 million through the quarter ended March 31, 2026 /documents/b7b08904-13c4-4b89-9d77-12bdc6979378/
19. adversary complaint /documents/71143a74-e6dd-4aee-9961-b95261e9b460/
20. adjourned the hearing /documents/cdce2f5f-3212-485e-b980-03dfaa5e26cc/
21. $239 million in cash https://www.reuters.com/markets/deals/clinical-lab-operator-labcorp-buy-bankrupt-genetic-test-maker-invitae-239-mln-2024-04-25/
22. filed chapter 11 https://www.prnewswire.com/news-releases/invitae-files-for-voluntary-chapter-11-protection-pursues-sale-process-302061304.html
23. struggled to regain investor interest https://www.bloomberg.com/news/articles/2024-02-14/softbank-backed-genetic-test-firm-invitae-files-for-chapter-11
24. burning about $9 million to $10 million per month https://www.medtechdive.com/news/labcorp-acquire-invitae-bankruptcy-assets/714330/
25. sell Women's Health assets to Natera, Inc. https://www.fertilitybridge.com/news-articles/invitae-bankruptcy-natera-asset-sale
26. most contested issue https://www.law360.com/bankruptcy-authority/articles/1856315/settlement-urged-before-decision-in-invitae-debt-deal-row
27. added oncology and rare-disease testing https://www.fiercebiotech.com/medtech/labcorp-picks-invitae-portfolio-239m-bankruptcy-sale
28. finalized the acquisition https://www.prnewswire.com/news-releases/labcorp-finalizes-acquisition-of-select-assets-of-invitae-302214260.html
29. opposed Invitae's retention of Kirkland https://news.bloomberglaw.com/bankruptcy-law/doj-bankruptcy-unit-opposes-invitaes-bid-to-hire-kirkland
30. permitted Kirkland to continue https://www.govinfo.gov/app/details/USCOURTS-njb-3_24-bk-11362/USCOURTS-njb-3_24-bk-11362-0
31. plan needed adjustments https://www.law360.com/articles/1861230/invitae-s-ch-11-plan-needs-tweaking-judge-says
32. denied the standing motion https://www.law360.com/articles/1857641/judge-denies-go-ahead-for-suit-over-invitae-refi-deal
33. filed a notice of appeal https://www.law360.com/bankruptcy-authority/articles/2384229/nj-federal-judge-upholds-invitae-s-ch-11-plan-orders
34. allowed the Delaware contract fight to go forward https://www.law360.com/bankruptcy-authority/articles/2361054/bankruptcy-judge-lets-del-court-take-invitae-contract-fight
35. Natera's award against Invitae adjusted https://news.bloomberglaw.com/ip-law/natera-award-cut-by-10-million-as-invitae-faces-future-royalty
36. claims and noticing agent https://www.veritaglobal.net/invitae