Mobileum: Prepackaged Chapter 11 and $530M Debt Reduction
Filed July 23, 2024 in SDTX with an RSA; $60M new-money DIP and $100M roll-up. Emerged Sept 12, 2024 after cutting ~$530M debt.
Mobileum, Inc. is a Cupertino, California based provider of analytics software for telecommunications operators, with offerings across roaming and network services, fraud and security, testing and service assurance, and customer engagement. The company filed for Chapter 11 protection on July 23, 2024 in the U.S. Bankruptcy Court for the Southern District of Texas. Mobile World Live reported that the filing aimed to trim more than $500 million of debt while keeping global operations running and leaving non-U.S. subsidiaries outside the cases, and the company's restructuring announcement emphasized continuity of products and services.
The case moved quickly. The plan was confirmed on September 11, 2024 and became effective on September 12, 2024, after a debtor in possession financing package supplied $60 million of new money and rolled up $100 million of prepetition debt. Mobile World Live reported that the restructuring eliminated about $530 million of debt and closed in less than two months.
The filing also played out against a high profile dispute between private equity firms. H.I.G. Capital acquired Mobileum from Audax Private Equity in January 2022 for $915 million, and later sued Audax in Delaware state court, alleging inflated financials and an overpayment of roughly $250 million. Bloomberg and Axios outlined that dispute and the unusual direct litigation between the firms, while Commsrisk reported that a June 2024 ruling allowed core claims to proceed with a trial timeline that could stretch into 2026.
| Debtor | Mobileum, Inc. |
| Court | U.S. Bankruptcy Court for the Southern District of Texas (Houston Division) |
| Case Number | 24-90414 (CML) |
| Judge | Christopher M. Lopez |
| Petition Date | 2024-07-23 |
| Plan Type | Prepackaged Chapter 11 plan supported by an RSA |
| Headquarters | Cupertino, California |
| Customers | 1,000+ in 150+ countries |
| Employees and Contractors | Approximately 1,800 across about 60 countries |
| Total Funded Debt (prepetition) | Approximately $628 million |
| Total Secured Claims | Approximately $690.5 million |
| Debt Eliminated | Approximately $530 million |
| Debt at Emergence | Approximately $160 million |
| DIP New Money | $60 million |
| DIP Roll-Up | $100 million |
| Plan Confirmation Date | 2024-09-11 |
| Effective Date | 2024-09-12 |
| Case Duration | Less than two months |
| First Lien Recovery | About 43% via 96.5% of new equity |
| Second Lien Recovery | About 3% via 3.5% of new equity |
| General Unsecured Claims | Unimpaired (paid in ordinary course) |
| Majority Owner | H.I.G. Capital |
Restructuring Overview
Filing posture and restructuring support
Mobileum entered Chapter 11 with a restructuring support agreement backed by approximately 88% of first lien lenders and 77% of second lien lenders, plus support from H.I.G. Capital as the majority equity holder, as described in the company's restructuring announcement. The First Day Declaration describes historical accounting irregularities, operational disruptions, and liquidity pressure as the backdrop for the filing. The debt structure going into the cases included roughly $414.8 million of first lien term loans, $57.1 million of first lien revolver claims, $34.7 million of first lien notes, and $183.9 million of second lien claims.
Liquidity and debtor in possession financing
The debtors obtained a $60 million new money term loan facility with a $100 million roll up of prepetition debt, as detailed in the DIP Motion. The facility priced at Term SOFR plus 6.00% (or Base Rate plus 5.00%), with a 3.0% exit premium on certain prepayments and customary covenants tied to a 13 week rolling budget. The Final DIP Order confirmed priming liens and superpriority claims in favor of the DIP lenders and adequate protection liens for prepetition secured parties.
Plan structure and creditor recoveries
The Confirmation Order approved a plan that converted secured debt to equity and canceled existing parent equity. First lien claims received 96.5% of new equity (subject to management incentive plan and Tranche B dilution), while second lien claims received 3.5% of new equity. General unsecured claims were unimpaired and paid in the ordinary course. The debt reduction from about $628 million to roughly $160 million represented approximately $530 million of elimination, consistent with post emergence reporting by Mobile World Live.
| Class | Treatment | Recovery |
|---|---|---|
| First Lien Claims | New equity allocation | Approximately 43% recovery via 96.5% of new equity |
| Second Lien Claims | New equity allocation | Approximately 3% recovery via 3.5% of new equity |
| General Unsecured Claims | Unimpaired | 100% in ordinary course |
| Existing Parent Equity | Canceled | 0% |
Operating footprint during the case
Mobileum stated that its global operations were expected to continue without interruption and that non-U.S. subsidiaries were not part of the Chapter 11 filings, as reported by Mobile World Live. The First Day Declaration and company materials describe a large global customer base and a sizable workforce across multiple regions.
Timeline to confirmation and effective date
The case progressed rapidly under the RSA framework, with confirmation on September 11, 2024 and the effective date on September 12, 2024. External reporting highlighted the speed of the case and the completion of the restructuring within two months in Mobile World Live.
| Date | Milestone |
|---|---|
| 2024-07-23 | Chapter 11 petitions and first day motions filed; DIP motion filed |
| 2024-07-24 | Interim DIP order entered |
| 2024-08-15 | Final DIP order entered |
| 2024-09-09 | First amended plan filed |
| 2024-09-11 | Plan confirmed |
| 2024-09-12 | Plan effective date; emergence |
Litigation context around the sponsor change
The bankruptcy unfolded alongside litigation between H.I.G. Capital and Audax Private Equity. Bloomberg and Transacted reported allegations that financial statements were inflated in connection with the 2022 sale, while Axios detailed Audax's counterclaims and the unusual posture of the dispute between private equity firms. Commsrisk noted that the Delaware court permitted central claims to proceed in June 2024. The litigation is separate from the Chapter 11 plan and continues outside the bankruptcy cases.
Frequently Asked Questions
What is Mobileum? Mobileum is a telecommunications analytics and software provider headquartered in Cupertino, California. Company profiles from CB Insights and Tracxn describe Mobileum as a global analytics provider founded in 2000 with offices in multiple regions.
Why did Mobileum file for Chapter 11? The First Day Declaration describes historical accounting irregularities, operational disruptions, and liquidity pressure as key factors behind the filing. External coverage also pointed to debt levels above $500 million and the need to restructure the balance sheet, as reported by Mobile World Live.
What triggered the H.I.G. vs. Audax dispute? H.I.G. Capital bought Mobileum from Audax Private Equity in January 2022 for $915 million and later sued Audax for allegedly inflating financials and overstating the business. Bloomberg and Axios reported the dispute, including the overpayment allegations and the uncommon direct litigation between private equity firms.
How much debt did Mobileum have at the time of filing? The Disclosure Statement listed approximately $690.5 million of total secured claims, including about $414.8 million of first lien term loans, $57.1 million of first lien revolver claims, $34.7 million of first lien notes, and $183.9 million of second lien claims. Total funded debt was approximately $628 million before the restructuring.
What DIP financing supported the case? The debtors obtained $60 million of new money term loans and a $100 million roll up of prepetition debt, according to the DIP Motion. The facility priced at Term SOFR plus 6.00% (or Base Rate plus 5.00%) and included an exit premium and customary budget and covenant requirements.
How much debt was eliminated through the plan? The restructuring reduced debt by roughly $530 million, consistent with Mobile World Live's report on the company's exit.
What did creditors receive under the plan? First lien claims received 96.5% of new equity with an estimated recovery around 43%, second lien claims received 3.5% of new equity with an estimated recovery around 3%, and general unsecured claims were unimpaired and paid in the ordinary course. Existing parent equity was canceled.
How long did the Chapter 11 case last? Mobileum filed on July 23, 2024 and reached an effective date on September 12, 2024. Mobile World Live noted that the restructuring was completed in less than two months.
What happened to non-U.S. subsidiaries and operations? Mobileum stated that operations were expected to continue without interruption and that non-U.S. subsidiaries were not included in the Chapter 11 filings, as reported by Mobile World Live.
What is the status of the H.I.G. and Audax litigation? Commsrisk reported that a June 2024 Delaware court ruling allowed core claims to proceed, with a trial timeline that could extend into 2026. The litigation remains separate from the Chapter 11 restructuring.
Who is the claims, noticing, and solicitation agent? Kroll Restructuring Administration LLC is listed as the claims, noticing, and solicitation agent.
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