Mondee Holdings: $191M Credit Bid Sale in 80 Days

Mondee Holdings, Inc., the Austin-based travel technology company that operated the largest air ticket consolidator network in North America and an AI-powered booking platform reaching 125 million travelers, voluntarily filed for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on January 14, 2025. The company entered bankruptcy with a pre-negotiated Restructuring Support Agreement backed by secured lenders TCW Asset Management Company, Morgan Stanley Investment Management, and Wingspire Capital, contemplating a $191 million stalking horse credit bid that would transfer substantially all assets to a newly formed entity while returning co-founder Prasad Gundumogula to the CEO role with a 75% equity stake. The case included a contested examiner motion from preferred equity holder Tuesday Investor LP that drew U.S. Trustee support before being denied, concluded the going-concern sale in 80 days, and later moved to a conversion motion after post-sale tax liabilities and cash constraints, resulting in case dismissal rather than a chapter 7 wind-down.

The restructuring reflects a pattern affecting travel technology companies that expanded through debt-funded acquisitions before COVID-19 and later pursued public listings through SPAC transactions. Mondee's July 2022 de-SPAC with ITHAX Acquisition Corp. suffered 99.4% redemptions, leaving the company with only $77 million of the anticipated $311 million in proceeds. The capital shortfall, combined with PIK interest accumulation, rising variable rates, and public company compliance costs, left the company without refinancing support from 35 potential partners and preceded the bankruptcy filing.

The Pre-Negotiated Sale Transaction

Mondee entered chapter 11 with a comprehensive Restructuring Support Agreement executed prepetition with its secured lender group. The stalking horse credit bid set out in the Sale Motion of $191 million consisted of all outstanding DIP facility obligations plus a portion of prepetition debt, structured to effect a going-concern sale under Section 363 rather than a plan of reorganization. The stalking horse bidder, Mondee Purchaser, LLC (an affiliate of TCW, Wingspire, and Gundumogula), agreed to assume contract cure costs up to a specified cap and fund estate wind-down expenses. The RSA provided for equity allocation granting Prasad Gundumogula a 75% majority stake, with TCW, Wingspire, and Morgan Stanley Investment Management receiving minority positions. The transaction contemplated approximately 50% debt reduction from prepetition levels.

The RSA preserved flexibility to pursue higher bids and terminate if fiduciary duties required. Notably, the Stalking Horse APA provided the bidder no bid protections—no break-up fee, termination fee, or expense reimbursement—reflecting the insider nature of the transaction where the lenders themselves comprised the stalking horse group. The absence of bid protections meant that any competing bidder could overbid without needing to cover stalking horse expenses. Piper Sandler's prepetition marketing efforts—contacting approximately 60 potential buyers—generated only two inbound inquiries and term sheet negotiations with one party beyond the stalking horse. When no competing qualified bids emerged by the bid deadline, the auction was cancelled and the transaction proceeded directly with the stalking horse bidder.

The DIP facility was provided by TCW Asset Management Company LLC (as Administrative Agent), Wingspire Capital LLC, and Morgan Stanley Investment Management. The initial DIP facility totaled $110 million, comprising $20 million in interim new money, $7.5 million in final new money, and $82.5 million in roll-up of prepetition loans. The Interim DIP Order was entered on January 16, 2025, with the Final DIP Order following on February 27, 2025. On March 19, 2025, the court entered an Amended Final DIP Order increasing the facility from $110 million to $140 million—a 27% increase that drew objection from Tuesday Investor LP but was ultimately approved. The increase supported the sale process and wind-down costs.

The court entered the Bidding Procedures Order on February 28, 2025, establishing the framework for the Section 363 sale. The Stalking Horse APA was initially filed on February 18, 2025, with amendments filed on February 24, 2025. With no competing bids received, the auction was cancelled and the Sale Hearing proceeded on March 26, 2025. The court entered the Sale Order on March 27, 2025, approving the transfer of substantially all assets to Tabhi. The Sale Motion was the most referenced document in the case with 39 incoming document references, reflecting the sale-centric nature of this restructuring.

Case Timeline and Key Milestones

The case proceeded from filing to sale closing in 80 days and from filing to final dismissal in approximately 140 days, generating over 700 docket entries across the 21 debtor entities.

Contested Matters: Tuesday Investor LP

The case featured active litigation from preferred equity holder Tuesday Investor LP, which challenged multiple aspects of the restructuring through several contested motions. On January 31, 2025, Tuesday Investor filed an Omnibus Objection to the DIP Motion and Bid Procedures, challenging the fairness of the restructuring, raising concerns about insider claims, and questioning the treatment of preferred shareholders. The same day, Tuesday Investor filed a Motion to Appoint Examiner, alleging concerns about Prasad Gundumogula's conduct as former CEO, questioning the proposed restructuring plan's treatment of equity, and raising self-dealing allegations regarding the insider stalking horse bid.

The Office of the U.S. Trustee filed a response on February 13, 2025 supporting examiner appointment. Despite this support from the U.S. Trustee, Judge Stickles denied the examiner motion on February 28, 2025, permitting the sale process to proceed.

Tuesday Investor continued its opposition through March 2025, objecting to the DIP Amendment increasing the facility from $110 million to $140 million, filing an Objection to Sale on March 19, 2025, and filing a Motion for Adverse Inferences on March 24, 2025. All objections were overruled, and the Adverse Inferences Motion was denied on March 28, 2025. The preferred equity holder received no recovery—consistent with the capital structure where secured debt (~$231 million) exceeded available value.

Path to Bankruptcy: From Consolidator Roll-Up to SPAC Shortfall

Founded in 2011 by Prasad Gundumogula in Silicon Valley (later headquartered in Austin, Texas), Mondee built North America's largest air ticket consolidator network through serial acquisitions. Gundumogula, who holds a master's degree in computer science from Andhra University, had previously built and exited three technology companies—Metaminds, LogixCube, and POD Technologies—creating scalable logistics systems deployed at Lowe's, Mercedes-Benz, General Motors, and Home Depot.

The company acquired 15 travel companies to establish market dominance in the consolidator space. Major consolidator brands included Skylink Travel (Indian subcontinent market), C&H International (Asia), TransAm Travel (South America/South Pacific), Hariworld Travel (Middle East/Southeast Asia), CTS Fares, and Leto Travel (Canada). By 2020, Mondee had become the largest airfare wholesaler in North America by market size, serving travel agents with negotiated bulk rates from airlines. The company maintained 17 offices across the United States and Canada with core operations in India, Thailand, and Greece.

Technology investments accelerated in 2020-2023. In September 2020, Mondee acquired Rocketrip, a behavior change technology solution for business travel programs founded in 2013 and backed by Y Combinator, Bessemer Venture Partners, and Google Ventures with $32 million in funding. In November 2023, Mondee acquired Purplegrids, a Silicon Valley AI company, in a $19 million all-stock deal, bringing a 50+ person team with experience from Apple, Google, Meta, PayPal, and Oracle. In July 2023, on the one-year anniversary of its Nasdaq listing, Mondee launched "Abhi", an AI-powered travel assistant integrating Google Bard, ChatGPT, and IBM Watson—claimed to be the first fully integrated AI solution in the travel market. The company invested $22.3 million in R&D in 2023, including $7.6 million specifically for AI-driven travel recommendations.

Mondee went public through a SPAC merger with ITHAX Acquisition Corp. in July 2022. The original trust value was $241.5 million, with an additional $70 million committed through a PIPE at $10 per share, for total expected proceeds of approximately $311.5 million. The transaction closed with a market capitalization of approximately $740 million, but the company collected only approximately $77 million in funding—far below expectations.

The shortfall resulted from redemptions: 24,011,532 shares were redeemed, representing 99.427% of total outstanding shares. Only 138,468 shares remained after redemptions, leaving approximately $1.4 million from the $241.5 million trust. The PIPE proceeds of $70 million provided most of the actual capital raised. Deutsche Bank resigned as lead SPAC advisor before closing. The capital shortfall meant the company could not refinance its prepetition debt or fund operations adequately.

Despite improving operating performance, the capital structure remained constrained. FY 2023 results showed net revenue of $222.3 million (39% year-over-year growth), gross bookings of $2.6 billion (19% growth), a take rate approaching 10% (double pre-pandemic levels), and Adjusted EBITDA of $21.0 million (77% growth). The debt burden remained high.

Between October 2023 and March 2024, the company's investment bankers contacted 35 potential refinancing partners. Despite significant resources invested in the effort, none agreed to refinance the debt. In September 2024, Mondee extended its term loan maturity to June 30, 2028 and its preferred equity put option to December 31, 2028—expecting to unlock at least $20 million of additional growth working capital. In November 2024, a restructuring committee of three independent directors was formed. On November 27, 2024, the company received a Nasdaq delisting notice after failing to file its Form 10-Q for Q3 2024. The Board decided not to contest delisting, and trading was suspended on December 6, 2024.

Multiple factors contributed to the distress: the COVID-19 pandemic's effects on global travel, the $150 million term loan taken in 2020 for acquisitions just before the pandemic, payment-in-kind interest accumulation during the downturn that inflated leverage, the SPAC transaction with 99.4% redemptions, public company compliance costs, the lack of refinancing despite 35 contacts, variable interest rates climbing over 5% due to global inflation, and the loss of key sales employees to competitors.

Post-Sale Complications and Dismissal

On April 4, 2025, Tabhi (Mondee Purchaser, LLC) acquired substantially all of Mondee's assets, completing the Section 363 sale in 80 days from petition. Majority ownership and the CEO role went to Prasad Gundumogula, who made a substantial personal cash investment to acquire his 75% equity stake. TCW Asset Management and Morgan Stanley Investment Management retained minority stakes. TCW serves as administrative agent on the new credit facility, with MSIM and Wingspire participating. The transaction reportedly cut debt roughly in half while preserving more than 1,000 jobs and satisfying at least $3.5 million in claims that would otherwise remain unpaid.

On March 19, 2025 (before closing), the debtors filed a Conversion Motion seeking to convert to chapter 7 or dismiss, citing insufficient post-sale liquidity to fund wind-down, at least $1 million in anticipated tax liabilities from the sale transaction, and inability to cover post-closing administrative expenses. An Amended Motion to Dismiss was filed March 31, 2025, and the Dismissal Order was entered April 11, 2025, with final dismissal effective June 2, 2025.

The Final Dismissal Order provided that all prior orders (including the Final DIP Order and Sale Order) remain in full force, professional retentions were terminated, Kroll was relieved of claims agent duties, debtors were authorized to dissolve corporate entities, and all rights, causes of action, and claims were reserved by the debtors and Mondee Purchaser. No releases were granted for fraud or gross negligence. The progression from negotiated sale to conversion motion to dismissal reflects the complexity of winding down multi-jurisdictional travel technology operations and post-closing liabilities.

Debtor Entities and Operating Structure

The chapter 11 filing encompassed 21 debtor entities: Mondee Holdings, Inc. as the lead debtor, along with 20 affiliates spanning operating entities (Mondee, Inc.; Mondee Acquisition Company, LLC; Mondee Brazil, LLC), consolidator brand entities (Skylink Travel entities in California, New York, and Illinois; C&H Travel & Tours, Inc.; Trans Am Travel, Inc.; TransWorld Travel, Inc.; Hari-World Travel Group, Inc.; Cosmopolitan Travel Service, Inc.; and Cosmopolitan Travel Services Inc.), and various state-specific service entities. All 21 entities were assigned wind-down names post-sale (e.g., "MH Wind Down Co., Inc." for the lead debtor).

International Mondee entities in Brazil, Mexico, India, Canada, and Thailand were excluded from the bankruptcy filing and continued operations without court oversight. Parent company distress affected intercompany relationships and global operations.

Consumer Privacy and Administrative Matters

The court appointed Lucy L. Thomson as Consumer Privacy Ombudsman to oversee customer data handling during the asset sale. Mondee's platform maintained access to personal information of 125 million travelers through its distribution network—including travel histories, preferences, payment information, and contact details. The CPO appointment reflected data protection concerns in travel technology bankruptcies.

The Omnibus Fee Order entered May 28, 2025 approved final fee applications for all retained professionals, with a voluntary fee reduction of $41,907.84 made at U.S. Trustee request. Notable administrative claims included KLDiscovery Ontrack, LLC's claim for $343,517.78 in post-petition services (settled for $275,000, payable by Mondee Purchaser) and George Perdikakis's claim on behalf of former Greece-based employees for €176,295.47 (settled with the Purchaser).

No Official Committee of Unsecured Creditors was formed. The absence of a UCC was consistent with the pre-negotiated sale structure, the 100-day expedited timeline, secured debt (~$231 million) exceeding available assets, and minimal to non-existent unsecured recovery anticipated.

Industry Context

Mondee's bankruptcy followed a SPAC transaction with 99.4% of shares redeemed. Public company compliance costs increased overhead, stock price decline limited equity-based refinancing, and Deutsche Bank resigned as lead SPAC advisor before closing.

Prasad Gundumogula retained a 75% ownership stake and the CEO role. Industry relationships remain essential to the consolidator business model, and lenders accepted debt reduction to preserve going-concern value. Gundumogula made a personal cash investment to acquire his equity stake.

Mondee's distress occurred against a backdrop of evolving consolidator economics. Airlines are increasingly pursuing direct distribution through NDC adoption, consolidators are adapting technology stacks to remain competitive, and margin compression from reduced override structures continues. Piper Sandler's outreach to 60 potential acquirers yielded only two inbound inquiries, and no competing qualified bids emerged.

The case highlighted challenges in winding down global travel technology operations: 21 debtor entities spanning multiple states, international affiliates excluded from filing, Greece employee claims requiring cross-border settlement, Consumer Privacy Ombudsman oversight of traveler data, and post-sale tax liabilities that triggered the conversion motion.

Frequently Asked Questions

Was Mondee a prepackaged or pre-negotiated case?

Pre-negotiated. Unlike a prepackaged case (where voting occurs prepetition), Mondee entered chapter 11 with an RSA and stalking horse bid in place but conducted the Section 363 sale process during the case. No plan of reorganization was confirmed; the case concluded via asset sale and dismissal.

Who owns Mondee after chapter 11?

Tabhi (Mondee Purchaser, LLC), owned by Prasad Gundumogula (75% majority stake) and affiliates of TCW Asset Management Company and Morgan Stanley Investment Management (minority stakes).

Was there an Official Committee of Unsecured Creditors?

No. The U.S. Trustee did not appoint a UCC, consistent with the pre-negotiated sale structure and the secured debt (~$231 million) exceeding available value.

Why did the examiner motion fail despite U.S. Trustee support?

Judge Stickles denied the examiner motion on February 28, 2025, permitting the sale process to proceed. The court did not appoint an examiner despite the U.S. Trustee's support.

What happened to existing equity holders?

Shareholders received no recovery. Trading was suspended on December 6, 2024, following the Nasdaq delisting notice, and equity interests were cancelled without distribution through the Section 363 sale.

Why did Mondee request chapter 7 conversion?

Post-sale cash constraints and at least $1 million in anticipated tax liabilities from the sale transaction prevented orderly administrative wind-down. The debtors ultimately sought and obtained dismissal rather than chapter 7 conversion.

How long did the case take?

80 days from petition (January 14, 2025) to sale closing (April 4, 2025); approximately 140 days from petition to final dismissal (June 2, 2025).

What caused the SPAC transaction to fall short of expectations?

ITHAX shareholders redeemed 99.427% of outstanding shares (24,011,532 of 24,150,000), leaving only 138,468 shares and approximately $1.4 million from the $241.5 million trust.

What happened to international operations?

Mondee entities in Brazil, Mexico, India, Canada, and Thailand were excluded from the chapter 11 filing and continued operations outside bankruptcy court oversight.

Why were there no stalking horse bid protections?

The stalking horse bidder received no break-up fee, termination fee, or expense reimbursement—reflecting the insider nature of the transaction where the secured lenders themselves comprised the stalking horse group. The absence of bid protections allowed any competing bidder to overbid without covering stalking horse expenses.

For continued coverage of significant chapter 11 filings, visit ElevenFlo's bankruptcy blog.