NanoString: Patent Litigation Drives $392.6M 363 Sale to Bruker

NanoString’s February 2024 chapter 11 case in Delaware is a clear illustration of a “litigation-driven” liquidity crisis: the company’s capital structure and cash runway tightened as multi-front patent disputes created damages exposure, injunction risk, and bond-related pressure around products that management described as core to its spatial biology platform. The filing launched a court-supervised transaction process designed to keep the business operating long enough to run a competitive auction for the operating assets, while financing those operations through a lender-backed DIP that blended new money with a large roll-up component.

The case then followed a familiar sale-case arc with unusually technical underlying facts. NanoString’s operating assets were sold through a section 363 process after a stalking horse baseline and a competitive auction that culminated in Bruker’s reported winning bid of roughly $392.6 million in cash plus assumed liabilities. With the operating platform transferred, the remaining estates moved into a plan-driven wind-down framework centered on a plan administrator and an oversight committee, shifting the case from “keep the lights on and sell” to claims reconciliation, distributions, and litigation administration.

NanoString’s Fast-Track Chapter 11: Litigation-Driven DIP, Competitive 363 Auction, and Post-Sale Wind-Down

Business and operating profile: instruments-plus-consumables economics and spatial biology scale. NanoString operated as a life sciences tools company selling both instruments and consumables/reagents, a model that tends to create recurring revenue streams but also requires working capital for manufacturing, distribution, and service support. The First Day Declaration describes that operating model, and the company’s prepetition operating results releases provide a useful “baseline” snapshot of the scale of the business before the litigation-driven crisis became the dominant driver of the narrative. In its third quarter 2023 results, NanoString reported $48.1 million of quarterly revenue (63% year-over-year growth), with spatial biology revenue of $28.9 million and an nCounter segment at $19.2 million, and reported $97.1 million in cash, cash equivalents, and short-term investments as of September 30, 2023. The installed base included approximately 510 spatial biology systems and approximately 1,140 nCounter systems, which helps explain why injunction risk mattered: when instruments are deployed in customer labs, discontinuity can affect not only new sales but reagent pull-through, service, and the company’s perceived reliability as a vendor.

The product names at the center of the case appear throughout both the external coverage and the bankruptcy filings. NanoString’s public materials described GeoMx as a spatial biology platform, while bankruptcy and sale reporting described CosMx, GeoMx, AtoMx, and nCounter as key product lines that potential buyers would likely want to acquire as a package. A central strategic tension in the case was therefore not only “who will own the platform,” but “can the platform be sold fast enough to avoid litigation-driven disruption that could collapse value.”

The litigation overhang: a verdict, willfulness, and injunction dynamics across jurisdictions. NanoString’s distress was tightly linked to patent litigation with 10x Genomics and related patent holders. A unanimous jury verdict in the U.S. District Court for the District of Delaware resulted in over $31 million in damages, including $25 million in lost profits and $6 million in royalties, and a willfulness finding. The bankruptcy filing was linked to the $31 million award and GeoMx-related litigation pressure.

A liquidity and continuity story sat behind the filing: management described a litigation campaign, injunction activity, and bond requirements in the First Day Declaration that created immediate pressure around product sales and operations. For life sciences tools companies, injunction risk is not simply a legal exposure; it can become an operational “cliff” if a product is enjoined, because the sales pipeline, installed base support, and reagent revenue expectations can change quickly when customers anticipate product availability risk. In NanoString’s case, that risk was not confined to one jurisdiction. European Unified Patent Court proceedings included an appeals decision overturning a prior preliminary injunction affecting CosMx sales in multiple EU member countries, highlighting that the litigation risk was global and that product continuity was in flux while the chapter 11 case was underway.

The post-sale story underscores why buyers and lenders would care about litigation posture even after a bankruptcy sale. A permanent injunction against GeoMx products sold by Bruker was issued in December 2024 and linked to the earlier damages verdict. That development occurred after NanoString’s business assets had been acquired, but it illustrates the risk that an operating-asset buyer in a litigation-heavy case is taking: even if the debtor’s liabilities are left behind, product-specific injunction risk can follow the acquired business if it is tied to ongoing conduct or the products themselves.

Why the company filed: liquidity strain, litigation-driven uncertainty, and workforce reductions. The operating profile included losses, including a $37.4 million net loss in Q3 2023, and limited capacity to absorb extraordinary litigation costs and bond or stay requirements described in the First Day Declaration. The external reporting around the filing also referenced workforce reductions and broader operating pressures. The company eliminated about 50 employees (9% of workforce) during the quarter of the filing announcement, and a Nasdaq delisting notice arrived earlier in 2024. Management also implemented earlier workforce reductions, including the October 2023 cuts described in reporting, as part of a broader effort to preserve liquidity while the company faced litigation headwinds.

This history matters because it helps a restructuring professional understand whether the case was meant to be a reorganizational plan for a standalone NanoString, or a sale-and-wind-down designed to preserve the product platform under a new owner. The fact pattern points strongly toward the latter: the case moved into a structured auction quickly, and the DIP financing was designed with milestones in the DIP Motion that pushed the case toward a sale timeline rather than a long reorganization runway.

DIP financing: new money, roll-up, and milestone gating. NanoString’s chapter 11 financing package was structured as a term loan DIP facility up to $142.5 million, with a meaningful split between new liquidity and priority consolidation through roll-up. The DIP Motion described $47.5 million of new money (with an initial draw and a later draw tied to final approval) and a $95.0 million roll-up component (also staged between closing and final order). NanoString completed $47.5 million of DIP financing with existing lenders. The filings show the broader structure behind that headline: the DIP was also a mechanism to elevate prepetition exposure into DIP-priority obligations, which is common where the lender group expects a rapid sale and wants to reduce uncertainty about repayment priority.

Why roll-ups appear in DIP structures (and what they signal in a sale case). In practical terms, a roll-up is a priority-reset tool: prepetition lenders who are providing the postpetition facility may convert some portion of their prepetition debt into DIP obligations so that repayment sits at the top of the stack. In a sale case, that can signal the lenders’ confidence that a transaction will close on the timeline and that sale proceeds will repay the DIP, but it can also reduce the “free cash” available for other constituencies if the sale underperforms. For NanoString, the significant roll-up described in the DIP Motion underscores that the DIP was not only about adding liquidity; it was about creating a financing structure that could support a fast auction process while protecting the lender group through a period of litigation-driven volatility.

Sale process architecture: stalking horse baseline, bid protections, and an auction outcome. NanoString's case quickly moved into a 363 sale process. The Sale Motion described a stalking horse transaction with Nucleus Buyer, LLC at a $220.0 million cash purchase price baseline. The stalking horse baseline was tied to Patient Square Capital, which agreed to acquire NanoString in advance of the later auction outcome. This kind of stalking horse baseline matters in distressed M&A because it sets the floor and provides a signed deal that can be presented as “value preserving” even if no one outbids it; but it also sets the bid protections that other bidders must overcome.

The Bidding Procedures Order provided the court calendar and established key sale milestones. The bid deadline was April 12, the auction date was April 16 if needed, and the sale hearing was set for April 19, as stated in the Bidding Procedures Order. The Sale Order approved the sale to Bruker (or a permitted assignee), reflecting that the process attracted a competing bid that materially exceeded the stalking horse baseline. The winning bid was approximately $392.6 million in cash plus assumed liabilities, a 78% increase over the stalking horse price, highlighting the economic payoff of running a competitive process in a case where the business could be stabilized long enough to generate bidder interest.

Bid protections: breakup fee and expense reimbursement caps. Bid protections are central to the stalking horse negotiation because they determine how much “friction” a competing bidder faces when trying to overbid. NanoString’s sale process included a $6.6 million breakup fee (3% of purchase price) and expense reimbursement up to $3.3 million, with an aggregate cap of 4.5%, as described in the Sale Motion and Bidding Procedures Order. In a life sciences tools case, these protections can be especially important because due diligence can be complicated by litigation risk and product-specific IP issues; a stalking horse may want protection for the cost of diligence and negotiation in a compressed timeline.

Sale order terms: buyer identity, free-and-clear protections, and successor liability. The Sale Order approved the sale to Bruker Corporation and/or its permitted assignee and included findings supporting free-and-clear protections and successor-liability protections, subject to assumed liabilities and the terms of the approved asset purchase agreement. For restructuring professionals, the point of these findings is twofold. First, they are designed to maximize closing certainty: buyers are more likely to close when the order provides a strong legal shield against successor liability and later claims. Second, they shape the economics for the estate because a buyer may be willing to pay more for assets if it can avoid taking on legacy liabilities that would otherwise cloud the value proposition.

The acquisition included GeoMx, CosMx, AtoMx, and nCounter, and Bruker’s press releases described an asset deal and later completing the acquisition, framing the outcome as folding NanoString’s platforms into Bruker’s life sciences tools portfolio. That “what assets moved” picture is important for stakeholders evaluating the estate after the sale: if the core operating platform is transferred, the remaining estate’s value is largely sale proceeds plus any retained causes of action, net of administrative costs and priority claims.

Plan structure after the sale: plan administrator governance and wind-down mechanics. After the operating business was sold, NanoString's case shifted into a plan-driven wind-down. The Chapter 11 Plan described a structure built around a plan administrator and a three-member oversight committee, including two selected by required consenting lenders and one selected by the creditors’ committee. In sale cases, that governance structure is the practical “replacement” for a reorganized operating company board: it determines how claims are reconciled, how litigation is pursued or settled, and how reserves are set for disputed claims and administrative costs.

The plan also described a “distributable proceeds” framework that contemplated sale proceeds flowing through a waterfall for secured, priority, and general unsecured constituencies, alongside a wind-down reserve. A key operational term in many wind-down plans is the claim objection deadline. NanoString’s plan described a claim objection deadline defined as 180 days after the effective date, subject to extension mechanisms described in the plan. That deadline matters because it sets the schedule for how quickly the estate must review filed claims and either object or allow them; it also influences when distributions can be made with confidence.

Releases and exculpation: confirmation findings and customary carve-outs. The Confirmation Order includes findings approving the plan’s release and exculpation framework. At a high level, this includes debtor releases and a consensual holder release framework tied to notice and solicitation mechanics, and it includes exculpation provisions with customary carve-outs for misconduct. In a case where litigation conduct and IP disputes were central to the distress narrative, these carve-outs and the scope of releases matter for stakeholders assessing what claims (if any) remain viable against different parties after confirmation. The key point for this post is procedural rather than speculative: the plan moved through confirmation in June 2024 and the order’s findings provided the legal foundation for post-sale administration and claims resolution.

Effective date and “post-effective” administration: bar dates and deadlines that closed the door on late-filed requests. The plan’s effective date occurred on June 26, 2024 and established several case-critical deadlines tied to professional fees, administrative claims, and rejection claims. Those deadlines are important in any chapter 11, but they are especially central in sale-and-wind-down cases because the remaining estate is essentially a distribution engine: it needs to lock down the universe of administrative requests and professional fees to set reserves and make distributions.

The effective date notice described a professional fee deadline of August 12, 2024, an administrative claim bar date of July 26, 2024 for administrative claims other than section 503(b)(9) claims and professional fee claims, and a rejection claim deadline of July 26, 2024 for claims arising from rejection of executory contracts and unexpired leases. These are not abstract requirements: they determine whether a claimant or professional has a path to payment without seeking late-claim relief, and they allow the plan administrator to move from “open-ended” to “bounded” claim reconciliation.

Claims agent appointment: Kroll’s role in a multi-entity case with international debtors. The claims agent order authorized Kroll Restructuring Administration LLC to serve as administrative advisor effective as of the petition date, authorizing it to perform bankruptcy administration services and requiring fee applications under the Bankruptcy Code and applicable orders. In a case with multiple debtor entities including international subsidiaries, the claims and noticing infrastructure becomes a critical operational layer: it is how notice of bar dates, claim forms, and plan solicitation materials reaches counterparties and creditors. The effective date notice also tied post-effective filing mechanics to the claims agent function, demonstrating how the administrative layer stays relevant even after confirmation.

Key professionals: debtors’ counsel, patent counsel, financial advisor, and committee-side advisors. The docket reflects a professional roster that fits the case’s profile as both a litigation-heavy matter and a fast sale case. The debtors retained Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor, LLP as co-counsel, and retained Weil, Gotshal & Manges LLP as special patent counsel, reflecting the centrality of patent disputes to the case posture. The debtors also retained AlixPartners, LLP as financial advisor and Perella Weinberg Partners LP as investment banker, which is consistent with a sale process that needed both transaction execution and liquidity/cash forecasting workstreams.

On the creditor side, the official committee of unsecured creditors retained Akin Gump Strauss Hauer & Feld LLP and Troutman Pepper Hamilton Sanders LLP as committee counsel and Delaware counsel, and retained Piper Sandler & Co. as investment banker. In a sale case with a large reported swing from stalking horse baseline to auction outcome, committee representation and advisory capacity can matter because it shapes how the committee evaluates bid protections, supports or objects to sale terms, and negotiates plan governance and litigation preservation after the sale.

Post-effective posture: a wind-down estate, continuing reports, and litigation that outlived the bankruptcy sale. The case did not “end” at sale closing. A post-confirmation report filed later in the case reflects the plan’s confirmation date and effective date and indicates that the case continued in a post-effective wind-down posture. The continuation is consistent with the plan design: a plan administrator and oversight committee structure is inherently an ongoing process, because claims objections, distributions, and litigation management can extend well beyond the sale closing. The December 2024 injunction development further illustrates that, for market participants, litigation risk can remain a live issue even after ownership transfers, because product-specific injunctions can affect the acquired business’s ability to sell and support certain product lines.

Timeline: a compressed path from petition to auction, then a sale-to-plan sequence. The docket’s key sequence can be summarized as (1) filing and DIP stabilization in early February, (2) sale process milestones and bid protections in March and April culminating in the auction and sale order, and (3) plan confirmation and effective date in June, followed by post-effective administration and claims work. These milestones show why the DIP’s maturity and milestone gating mattered: the financing was designed for a case that needed to be “resolved” quickly through a transaction rather than carried for an extended runway.

Frequently Asked Questions

When did NanoString file for chapter 11 bankruptcy and where was the case filed?

NanoString and certain subsidiaries filed chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware on February 4, 2024.

Why did NanoString file for chapter 11 (what role did the 10x Genomics litigation play)?

The filing was linked to the damages verdict and injunction-related pressures described in the First Day Declaration and reported in filing coverage.

What were NanoString’s key product platforms (GeoMx, CosMx, nCounter) and why did injunction risk matter?

NanoString’s platforms included spatial biology systems with an installed base disclosed in its operating results releases, and key product lines included GeoMx, CosMx, and nCounter as part of the business being sold, alongside installed base disclosures. Injunction risk mattered because restrictions on sales or use of those products could affect instrument placement, reagent pull-through, and customer continuity, as reflected in litigation coverage and the First Day Declaration.

How much DIP financing did NanoString obtain, and how much was new money versus roll-up?

Court filings described a term loan DIP facility up to $142.5 million, including $47.5 million of new money and a $95.0 million roll-up component.

Who was the stalking horse bidder and what were the bid protections?

The Sale Motion described a stalking horse baseline with Nucleus Buyer, LLC at a $220.0 million cash purchase price and described bid protections including a breakup fee and expense reimbursement structure.

Who won the auction and what was the reported purchase price?

Bruker was the winning bidder with an approximate $392.6 million bid in cash plus assumed liabilities, exceeding the $220 million stalking horse baseline.

What happened to NanoString’s business after the sale (did Bruker acquire the product lines)?

The Sale Order approved the sale to Bruker (or a permitted assignee), and Bruker described an asset deal and later completing the acquisition.

When was the plan confirmed and when did it become effective?

The court entered a Confirmation Order on June 18, 2024, and the effective date notice stated that the plan became effective on June 26, 2024.

Who ran the post-sale wind-down under the plan?

The plan provided for a plan administrator to administer the wind-down and distributions, with an oversight committee structure described in the plan definitions.

Who is the claims agent for NanoString?

Kroll Restructuring Administration LLC serves as the claims and noticing agent (administrative advisor). The firm maintains the official claims register and distributes case notifications to creditors and parties in interest under the claims agent order.

For more chapter 11 case research and restructuring analysis, visit the ElevenFlo blog.