InVivo Therapeutics: Failed Trial, Full Creditor Recovery

InVivo Therapeutics Corporation, a clinical-stage biomaterials company focused on spinal cord injury treatment, filed chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware on February 1, 2024, alongside its parent entity InVivo Therapeutics Holdings Corp. The filing followed the failure of the company's pivotal INSPIRE 2.0 clinical trial and the subsequent decision to halt development of its Neuro-Spinal Scaffold implant. Rather than pursue a traditional reorganization, the debtors entered chapter 11 with an explicit liquidation strategy: sell program assets through a section 363 process, satisfy creditor claims in full, and wind down remaining operations through a liquidation trust.

After Globus Medical acquired the debtors' program assets for $312,000 in cash, the liquidation trustee satisfied all filed and scheduled claims and distributed approximately $0.60 per share to equity holders — a payout that exceeded the disclosure statement's earlier estimate of roughly $0.42 per share. A final report was filed on March 6, 2026, positioning the cases for closure.

Debtor(s)	InVivo Therapeutics Corporation and InVivo Therapeutics Holdings Corp.
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-10137
Petition Date	February 1, 2024
Confirmation Date	June 21, 2024
Judge	Hon. Mary F. Walrath

INSPIRE 2.0 Failure and the Path to chapter 11

InVivo Therapeutics was a clinical-stage biomaterials and biotechnology company operating from Burlington, Massachusetts, with its principal program centered on the Neuro-Spinal Scaffold (NSS) implant for acute thoracic spinal cord injuries. The company's earlier INSPIRE 1.0 single-arm study had shown safety signals and AIS conversion rates that exceeded historical controls, leading to the single-blind, randomized, controlled INSPIRE 2.0 trial enrolling 20 patients across Level I trauma centers. The INSPIRE 2.0 study was designed to evaluate both the safety and probable benefit of the NSS implant, with the primary endpoint measuring improvement of at least one AIS grade at six months post-implantation.

In March 2023, InVivo announced topline results showing the INSPIRE 2.0 study did not meet its primary endpoint. Two of ten NSS patients (20%) achieved an improvement of at least one AIS grade at six months, compared with three of ten control patients (30%). A preplanned analysis confirmed no significant benefit compared with the control group, though the device demonstrated an acceptable safety profile. The study was terminated and closed to further follow-up.

The First Day Declaration filed by Richard Christopher tied the bankruptcy to the failed INSPIRE 2.0 results and the resulting decision to halt further NSS development. After the trial failed, management shifted to monetizing assets and winding down the INSPIRE 1.0 and 2.0 studies under an FDA-approved IDE amendment. The declaration stated that chapter 11 offered the best path to conclude the clinical programs, preserve value through a sale process, and avoid a chapter 7 liquidation. Management specifically warned that losing the remaining employees with program-specific knowledge would impair any asset sale, and that a chapter 7 conversion would eliminate the institutional continuity needed to transfer the program assets to a buyer.

InVivo filed for chapter 11 on February 1, 2024, listing assets between $1 million and $10 million against liabilities of $500,000 to $1 million in its petition schedules. Shares fell 48% on news of the filing.

Capital Structure and Liquidity at Filing

The First Day Declaration reported approximately $5.4 million of cash on hand as of the petition date, with no secured debt, no proposed DIP financing, and no liens on cash. The absence of any prepetition secured obligations meant the estate's cash was unencumbered and fully available for administrative expenses and distributions. Management expected to fund the entire sale process and satisfy all administrative and creditor claims from existing cash reserves without post-petition borrowing — an unusual posture for a chapter 11 case and one that significantly simplified the path to full creditor recovery.

On the unsecured side, the declaration identified ordinary-course accruals, a subordinated former-landlord claim arising from a lease termination and settlement agreement with ARE-MA Region No. 59 LLC relating to InVivo's former Cambridge premises, indemnification obligations, CRO-related obligations tied to the clinical wind-down, and a possible SSG success fee contingent on a completed transaction. The relatively limited unsecured exposure — combined with the $5.4 million cash cushion — supported the disclosure statement's later projection of 100% creditor recoveries. InVivo had 3,105,446 common shares outstanding and 2,380,394 warrants, with the warrants substantially out of the money.

Section 363 Sale to Globus Medical

The debtors launched the sale process on the petition date, filing a motion for asset sale seeking court approval for bid procedures and an auction of substantially all program assets. The proposed schedule set a March 29, 2024 bid deadline, an April 3 auction, and an April 5 sale hearing. The bid procedures order was entered on February 22, 2024, establishing the framework for the marketing process. SSG Advisors served as the debtors' investment banker to manage the sale.

The asset purchase agreement filed with the rescheduled sale-hearing notice identified Globus Medical, Inc. as the buyer. The APA defined the acquired assets as the NSS program-related assets — including intellectual property, regulatory files, clinical data, and related contracts — but excluded cash and cash equivalents, which remained in the estate for creditor distributions. Consideration was set at a $312,000 cash purchase price plus assumption of specified liabilities, with a $30,000 deposit credited at closing. The modest purchase price reflected the early-stage nature of the program assets following the failed pivotal trial, while the estate's value to creditors derived primarily from the $5.4 million cash reserve rather than the sale proceeds.

The sale order entered on July 8, 2024 approved the Globus transaction, found the purchaser acted in good faith, and held that the consideration was fair and reasonable and represented reasonably equivalent value. The order authorized the transfer free and clear of liens, claims, and encumbrances.

Plan of Liquidation and Creditor Recoveries

The disclosure statement filed on April 29, 2024 projected 100% cash recoveries for classes 1 through 5, including general unsecured claims and ARE subordinated claims. For class 6 equity interests, the disclosure statement estimated roughly $1,296,605 in aggregate value, or about $0.417 per share, but stated that equity would receive nothing unless class 5 claims were paid in full. Under the plan, the liquidation trustee would receive the transferred liquidation trust assets on the effective date, maintain expense and claims reserves, pursue claim objections and retained causes of action, and direct the distribution agent to make both creditor distributions and any distributions on beneficial trust interests.

The confirmation order entered on June 21, 2024 confirmed the joint plan of liquidation. All voting classes voted to approve the plan, as reflected in a June 17, 2024 voting declaration — a result consistent with the projected 100% creditor recoveries. The plan became effective on July 12, 2024. Following the effective date, FINRA published a UPC notice designating the shares as NVIVQ, confirming that the joint plan of liquidation had reached its effective date and that liquidation trust assets would be distributed to holders of allowed interests following satisfaction of class 5 claims.

Equity Distribution and Case Closure

On August 26, 2025, the liquidation trustee filed a notice of satisfaction of claims, representing that all filed and scheduled claims had been paid in full. That notice laid the groundwork for the equity distribution that followed. By October and November 2025, the trustee formally represented that the remaining liquidation trust assets were available for class 6 equity holders. The equity distribution motion stated that full claims reconciliation and satisfaction made the equity payout possible — a result the disclosure statement had flagged as contingent on all class 5 claims being satisfied first.

The court entered an equity distribution order on November 18, 2025. The amended distribution notice then set a December 30, 2025 record date and a January 9, 2026 payment date for a distribution of $0.5991495 per share to class 6 interest holders. That per-share amount exceeded the earlier disclosure statement estimate of approximately $0.417 by roughly 44%, reflecting a more favorable outcome on claims reconciliation and expense management than the estate had initially projected.

The quarter-ending December 31, 2025 post-confirmation report showed $1,901,019 of cumulative cash disbursements since the effective date, including $334,205 on administrative claims, $19,000 on priority claims, and $1,606,387 on general unsecured claims. The report listed $0 paid on equity as of December 31, 2025, with the equity distribution expected to follow shortly after the reporting period. The same report confirmed that no additional professional fees beyond the $592,523.59 approved at confirmation had been incurred in the quarter.

The final-decree motion filed on December 2, 2025 stated that plan transactions had been fully consummated except for the equity distribution, that all disputed claims had been reconciled, and that only the equity distribution, remaining U.S. Trustee fees, and other post-effective-date fees and expenses remained before closure. The motion requested entry of a final decree closing the cases. A final report was filed on March 6, 2026, positioning the cases for imminent closure.

Professional Fees and Key Advisors

The order approving final fee applications granted final compensation to five professionals, totaling $592,523.59 inclusive of expenses:

Landis Rath & Cobb LLP	$324,431.63
Wilmer Cutler Pickering Hale and Dorr LLP	$147,902.56
SSG Advisors	$40,600.00
Sonoran Capital Advisors	$50,172.40
Kurtzman Carson Consultants / Verita	$29,417.00

Landis Rath & Cobb served as Delaware bankruptcy counsel, WilmerHale served as general corporate counsel, Sonoran Capital Advisors served as financial advisor, and SSG Advisors served as investment banker managing the section 363 sale process. Kurtzman Carson Consultants served as claims and noticing agent. The total professional fee burden of $592,523.59 was modest relative to the estate's $5.4 million cash position, contributing to the outcome in which all creditor classes were paid in full and a meaningful equity distribution remained possible.

Key Timeline

February 1, 2024	Chapter 11 petitions filed; debtors announced liquidation strategy through section 363 sale
February 22, 2024	Bid procedures order entered
March 29, 2024	Original bid deadline
April 29, 2024	Disclosure statement filed with projected 100% creditor recoveries
June 17, 2024	Creditors voted to approve plan of liquidation
June 21, 2024	Confirmation order entered
July 8, 2024	Sale order entered approving Globus Medical transaction
July 12, 2024	Plan effective date
September 5, 2024	Final fee applications approved
August 26, 2025	Notice of satisfaction of claims filed
November 18, 2025	Equity distribution order entered
January 9, 2026	Equity distribution payable date ($0.5991495 per share)
March 6, 2026	Final report filed

Frequently Asked Questions

What happened to InVivo Therapeutics?

InVivo Therapeutics filed chapter 11 petitions on February 1, 2024, after its pivotal INSPIRE 2.0 clinical trial for the Neuro-Spinal Scaffold implant failed to meet its primary endpoint. The company pursued a section 363 sale of its program assets to Globus Medical and confirmed a joint plan of liquidation on June 21, 2024.

Did InVivo Therapeutics creditors get paid in full?

The liquidation trustee reported that all filed and scheduled claims were satisfied in full. The disclosure statement had projected 100% cash recoveries for all creditor classes, and the post-confirmation reports confirmed those distributions were completed.

Did InVivo Therapeutics equity holders receive a distribution?

The amended distribution notice set a $0.5991495 per-share payment to class 6 equity interest holders, with a January 9, 2026 payment date. That amount exceeded the disclosure statement's earlier estimate of approximately $0.417 per share.

Who is the claims agent for InVivo Therapeutics?

Kurtzman Carson Consultants LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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