SiFi Networks America: $4.6M Insider Credit-Bid Sale to ArcLink Fiber

SiFi Networks America, LLC, an open-access fiber-to-the-premises network developer operating under the FiberCity brand, filed for chapter 11 protection on June 5, 2026 in the U.S. Bankruptcy Court for the District of Delaware, Case No. 26-10912. The freefall filing arrived with a sale already lined up: the proposed buyer, ArcLink Fiber LLC, is simultaneously the debtor's prepetition secured lender, its debtor-in-possession lender, and the stalking-horse purchaser under a section 363(k) credit bid.

The petition followed SNA Ltd.'s notice of intention to appoint administrators in the United Kingdom on June 4, 2026, one day before the U.S. filing, after the UK parent cut off funding to its American subsidiary. It also followed an adverse arbitration award of roughly $16.3 million against the debtor in litigation with Generate Capital affiliates. As of this reporting, an official committee of unsecured creditors has organized, the U.S. Trustee has challenged the proposed bid protections for insider buyer ArcLink, and the debtor's founding chief restructuring officer has resigned over a disclosed conflict days before the sale is set to be tested in court.

Debtor	SiFi Networks America, LLC
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	26-10912
Petition Date	June 5, 2026
Judge	Hon. Brendan L. Shannon
DIP Facility	$3.13 million from ArcLink Fiber LLC ($1,135,000 interim new money, $1,995,000 final, with a roll-up of prepetition secured debt)

SiFi is a Delaware LLC and wholly owned subsidiary of SiFi Networks America Ltd. ("SNA Ltd."), a UK private limited company. The debtor operates as an open-access wholesaler: it privately finances and builds citywide fiber networks for municipalities, then leases capacity to internet service providers rather than selling broadband directly to consumers. In 2021 the company announced plans for 30 open-access networks backed by over $2 billion in private capital. Its FiberCity networks span California cities including Placentia, Simi Valley, Oceanside, Palmdale, Fullerton and Escondido, along with Kenosha, Wisconsin; Farmington, Michigan; and Rockford, Illinois, with a workforce of approximately 33 employees. Dutch pension investor APG held a 16.7% direct stake in SNA Ltd. as of 2021; in April 2026, PATRIZIA, a German infrastructure investment manager, and APG/SCIF acquired SNA Ltd. outright from founders Mike Harris and Rowland Pickstock, a transaction that closed roughly six weeks before the chapter 11 filing.

Open the public case profile for docket context, hearings, advisors, and plan updates.

Parent Funding Cutoff and the Generate Arbitration Award

The debtor's declaration attributes the filing to a convergence of prepetition events in spring 2026. SNA Ltd. discontinued funding to the U.S. subsidiary and commenced its own UK insolvency process, filing a notice of intention to appoint administrators on the evening of June 4, 2026 — the same day an SNA Ltd. asset sale was scheduled to close, one day before the SiFi petition date.

The debtor also faced an adverse arbitration outcome. Generate Saratoga Springs Fiber Member, LLC and Generate East Hartford Fiber Member, LLC sued the debtor in December 2023 seeking specific performance on agreements tied to fiber networks in Saratoga Springs, New York, and East Hartford, Connecticut. An arbitration panel issued a Partial Final Award on January 22, 2026 and a Second Partial Final Award on May 1, 2026, finding SiFi jointly and severally liable for approximately $16.3 million in damages plus roughly $1.2 million in attorneys' fees — a combined exposure of about $17.5 million. The debtor moved to vacate the Partial Final Award on April 27, 2026, before the second award was issued.

The First Day Declaration of then-Chief Restructuring Officer Jacen Dinoff states that by the petition date the debtor could not pay its professional advisors, faced vendor threats to discontinue services, had no available third-party financing, and confronted the impending maturity of its prepetition secured loan. In the weeks before filing, the debtor's sales agent ran a marketing process for outside financing; no lender was willing to step in outside the existing capital structure. Separately, the loss of at least one anchor project weighed on the debtor's finances: Cleveland's city council moved to terminate its agreement for a citywide fiber buildout in May 2026, citing missed milestones, after approving the deal in 2023.

Capital Structure and the ArcLink Prepetition Loan

SiFi's prepetition balance sheet is thin and lopsided. On May 6, 2026, ArcLink Fiber LLC — a PATRIZIA affiliate — provided a $2.2 million prepetition loan secured by a first-priority lien on substantially all of the debtor's assets, maturing August 6, 2026. The note carries interest at 13% per annum, stepping up by an additional 5% on default.

Against that single secured tranche, the debtor reported approximately $26.4 million in accounts payable, accrued liabilities, and other unsecured obligations as of April 30, 2026 — roughly twelve times the secured debt. With a small first-lien claim controlling substantially all collateral and no unencumbered assets identified in the filings, unsecured creditors are positioned for minimal recovery outside whatever value the sale process generates above the secured and administrative claims.

DIP Financing and the ArcLink Roll-Up

The debtor sought and obtained a $3.13 million DIP facility from ArcLink, its prepetition secured lender, structured as new money layered with a roll-up of the prepetition note. New-money availability totals $3,130,000: $1,135,000 on entry of the interim order and the remaining $1,995,000 on entry of a final order. The facility rolls up $1,135,000 of prepetition secured debt on an interim basis, with a final roll-up of an additional $1,088,039 plus accrued interest and the lender's unreimbursed costs and fees.

The DIP matures at the earliest of 120 days after the petition date, acceleration on an event of default, or a lender termination notice — a schedule that lines up closely with the proposed sale timeline. The facility carries no funding fees, though the debtor must reimburse ArcLink's counsel, Clifford Chance US LLP and Young Conaway Stargatt & Taylor LLP. Use of proceeds is governed by an approved budget tied to a rolling 13-week cash-flow forecast, with actual disbursements capped at 110% of projected operating disbursements for each testing period, and a standard professional-fee carve-out. The court entered an interim DIP order at the June 9, 2026 first-day hearing approving the requested interim new-money draw and roll-up and granting ArcLink adequate-protection liens and superpriority claims for any diminution in collateral value. The final DIP hearing, originally set for July 1, 2026, has been rescheduled to July 8, 2026.

Credit-Bid Sale to Insider ArcLink Fiber

SiFi filed a stalking-horse 363 sale and bidding-procedures motion on the petition date, proposing to sell substantially all of its assets to ArcLink via credit bid. The proposed consideration totals approximately $4,603,039 under section 363(k), composed of DIP obligations, the prepetition note principal outstanding at closing, assumed liabilities, and cure amounts payable in cash. Assets to be sold include equipment, assumed contracts, causes of action (including avoidance actions), accounts receivable, and going-concern value.

The bidding procedures include a $200,000 expense reimbursement for ArcLink if a higher or better bid is selected at auction — the sole proposed bid protection, with no separate break-up fee. To manage its balance sheet during the sale process, SiFi also filed a series of omnibus motions to reject executory contracts and unexpired leases, with a first omnibus rejection motion filed alongside the sale motion and two further rounds filed later in June. Sherwood Partners, Inc. serves as sales agent under a retention application providing for a $35,000 retainer, a $60,000 consulting fee split between engagement and court approval, and a success fee of the greater of $80,000 or 9% of sale proceeds for a third-party transaction — replaced by a flat $80,000 fee if the credit-bid transaction closes as proposed.

The bidding-procedures hearing, originally scheduled for July 1, 2026, has been rescheduled to July 8, 2026 at 2:00 p.m. Eastern. The sale motion's proposed downstream milestones — a July 14 bid deadline, a July 17 auction, a July 29 sale hearing, and a July 31 closing — were built around the original hearing date and may shift with the one-week reschedule.

U.S. Trustee Challenge to Insider Bid Protections

The insider structure of the proposed sale drew an early objection. On June 12, 2026, the U.S. Trustee's office filed a limited objection to the bidding-procedures motion, challenging the $200,000 expense reimbursement for ArcLink. The Trustee's core argument is that ArcLink — an affiliate of the debtor's parent that is simultaneously the DIP lender — is a "fully-interested" bidder that does not need a financial incentive to bid, so the reimbursement is not "actually necessary to preserve the value of the estate" under the Third Circuit's standard in In re O'Brien Environmental Energy, Inc., 181 F.3d 527 (3d Cir. 1999).

The objection further argues the reimbursement risks chilling rather than promoting a robust marketing process, and separately objects to treating any allowed reimbursement as a superpriority administrative claim, contending the Bankruptcy Code provides no basis for superpriority bid protections outside a section 503(b) analysis. The Trustee asked the court to deny the reimbursement outright or, alternatively, cap it at no more than $50,000, require supporting documentation to the debtor, the committee, and the Trustee, and strip any superpriority status. The objection is set to be argued at the same July 8, 2026 hearing where the bidding procedures themselves are up for approval.

CRO Transition Amid Disclosed Conflict

Founding Chief Restructuring Officer Jacen Dinoff, who signed the First Day Declaration and led the debtor into the sale process, resigned effective June 29, 2026. Marjorie Kaufman of KCP Advisory Group, the same firm Dinoff worked through, succeeded him as CRO effective the same date. The change followed a disclosed potential conflict: Dinoff's romantic partner, Katherine Catanese, is an attorney at Squire Patton Boggs LLP, which had a limited role representing Generate Capital — the adverse party in the arbitration that helped drive the filing. The supplemental declaration states Catanese was walled off from the Generate representation and instructed not to discuss the matter with Dinoff, and that the two had not discussed the chapter 11 case; neither Squire Patton Boggs nor Generate has appeared or taken an active role in the SiFi case.

KCP's original retention application set discounted hourly rates for CRO services — $625 for the CEO/COO/CRO role, down from KCP's standard $750, plus $585 for senior managing directors, $450 for managing directors, and $175 to $400 for analysts and associates — with no success fee and a $223,216.22 security retainer held by the debtor for postpetition services. Dinoff served as CRO at the $625 hourly rate before his resignation; the debtor was still negotiating a revised proposed retention order reflecting the leadership change with the U.S. Trustee as of late June.

Creditors Committee and T-Mobile's Appearance

The U.S. Trustee appointed an official committee of unsecured creditors on June 22, 2026, seating FirstLight Fiber, Inc. and Markley Lowell, LLC as members. The committee selected Lowenstein Sandler LLP as lead counsel, effective June 23, 2026, with Polsinelli's Christopher Ward appearing as Delaware co-counsel. Lowenstein's proposed hourly rates run from $800 to $2,300 for partners, $955 to $1,685 for of counsel, $710 to $1,695 for senior counsel, $670 to $1,600 for counsel, $590 to $1,450 for associates, and $500 to $965 for staff attorneys, with annual rate adjustments and no retainer received. The retention application is set for a July 28, 2026 hearing, with objections due July 13, 2026 — a track that runs separately from the July 8 omnibus hearing on the sale and DIP.

A new party surfaced in the case on June 30, 2026: T-Mobile USA, Inc. filed a notice of appearance as a party in interest, represented by Pashman Stein Walder Hayden and Alston & Bird. The notice reserves T-Mobile's rights, claims, defenses, setoffs, and recoupments under its agreements, without stating the underlying commercial relationship. SiFi and T-Mobile announced a fiber partnership in August 2024 to expand open-access networks across Wisconsin and additional states.

Key Timeline

Date	Event
December 2023	Generate entities file complaint against the debtor
January 22, 2026	Arbitration panel issues Partial Final Award in the Generate litigation
April 2026	PATRIZIA and APG/SCIF acquire parent SNA Ltd.
April 27, 2026	Debtor moves to vacate the Partial Final Award
May 1, 2026	Arbitration panel issues Second Partial Final Award
May 6, 2026	ArcLink provides $2.2 million prepetition loan
June 4, 2026	SNA Ltd. files UK notice of intention to appoint administrators
June 5, 2026	Chapter 11 petition filed
June 9, 2026	First-day hearing; interim DIP order and other first-day orders entered
June 12, 2026	U.S. Trustee files limited objection to stalking-horse bid protections
June 22, 2026	Official Committee of Unsecured Creditors appointed
June 29, 2026	CRO Jacen Dinoff resigns over disclosed conflict; Marjorie Kaufman succeeds him
June 30, 2026	T-Mobile USA, Inc. appears as a party in interest
July 2, 2026	Extended deadline to file schedules and statements of financial affairs
July 8, 2026	Omnibus hearing on final DIP financing, bidding procedures, and retentions
July 13, 2026	Objection deadline for Lowenstein Sandler's committee-counsel retention
July 28, 2026	Hearing on Lowenstein Sandler's committee-counsel retention

Frequently Asked Questions

Why did SiFi Networks America file for chapter 11?

The debtor's First Day Declaration attributes the filing to its UK parent cutting off funding and entering its own UK insolvency process, combined with an adverse arbitration award of roughly $16.3 million in litigation with Generate Capital affiliates and the debtor's resulting inability to pay professionals or secure third-party financing.

Who is buying SiFi Networks America's assets?

ArcLink Fiber LLC, an affiliate of PATRIZIA and the debtor's prepetition secured lender and DIP lender, is the stalking-horse purchaser under a proposed credit bid of approximately $4.6 million.

Why did the U.S. Trustee object to the sale process?

The Trustee's limited objection argues that a $200,000 expense reimbursement for stalking horse ArcLink is unnecessary because ArcLink is already a fully-interested insider bidder, and asks the court to deny or cap the reimbursement and strip any superpriority status.

Who is the claims agent for SiFi Networks America?

Stretto serves as claims and noticing agent under an order approving its retention entered June 9, 2026. No claims bar date has been set on the docket as of this reporting.

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SiFi's insider-controlled sale structure echoes other recent freefall cases where a prepetition lender doubled as DIP financier and stalking-horse buyer, including Pivotal Post's $22 million insider credit-bid sale and CTN Holdings' credit-bid sale ahead of a chapter 7 conversion. For other telecommunications-sector chapter 11 cases, see coverage of WOM S.A.'s Delaware plan confirmation and Broadband Telecom's chapter 11 proceeding.