Sungard AS: Second Chapter 11 and Three-Part Asset Sale

Sungard AS New Holdings, LLC and 18 affiliates filed voluntary chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas on April 11, 2022, opening lead case No. 22-90018 before Hon. David R. Jones less than three years after emerging from a prepackaged 2019 restructuring. The Wayne, Pennsylvania IT availability services company entered with a Restructuring Support Agreement signed by holders of more than 80% of its prepetition term loans, a $335.9 million debtor-in-possession financing package, and a dual-track sale-or-equitization framework anchored by a reserve-price mechanism that capped the term lenders' credit bid.

The case resolved over six months through a sequence of separate asset sales rather than a single auction. The Bravo colocation, network, and workplace recovery assets went to 365 SG Operating Company on August 31, 2022, and the CMS/Eagle disaster-recovery and managed-services lines went to 11:11 Systems for $60 million in cash plus assumed liabilities under sale orders entered September 14 and October 17, 2022. The combined plan and disclosure statement disclosed that the sale waterfall was insufficient to satisfy first lien claims in full, leaving second lien and unsecured creditors with no distribution. Judge Jones confirmed the wind-down plan on October 17, 2022, and the effective date occurred on November 9, 2022.

Debtor(s)	Sungard AS New Holdings, LLC (19 jointly administered debtors)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	22-90018
Petition Date	April 11, 2022
Confirmation Date	October 17, 2022
Effective Date	November 9, 2022
Judge	Hon. David R. Jones (presiding at filing)
DIP Facility	$335.9M total: $50M ABL revolver (PNC Bank) and $285.9M term loan ($95.3M new money + $190.6M roll-up); ad hoc term lender group represented by Proskauer Rose
Claims Agent	Kroll Restructuring Administration LLC

UK Administration and Cross-Default Trigger

Sungard AS had reorganized in 2019 through a prepackaged chapter 11 that cut more than two-thirds of its funded debt. By 2021, revenue had fallen from approximately $833.4 million in 2019 to $587.3 million, a 29.5% decline of $246.1 million, and net comprehensive losses widened from $114.8 million to $169.4 million over the same period. The First Day Declaration of CEO Michael K. Robinson attributed the renewed distress to persistent operating cost structure problems, capacity utilization shortfalls in data center and workplace recovery facilities, COVID-19 disruption, and above-market real estate obligations across the U.S. footprint. As of the petition date the company served approximately 2,001 customers across nine countries, employed roughly 585 people in the U.S. and Canada, and operated 55 facilities — 24 data centers and 31 work area recovery centers.

The proximate trigger came from the United Kingdom. After failing to negotiate a Company Voluntary Arrangement or UK restructuring plan with landlords because a statutory majority could not be reached, the directors of Sungard AS UK appointed administrators on March 25, 2022 to facilitate a "trading administration" rather than a shutdown, citing historic UK energy price increases. The UK filing threatened to trigger cross-defaults under the U.S. prepetition credit agreements, and the debtors negotiated waivers with their U.S. lenders executed the same day to preserve runway for a U.S. chapter 11 commencement. Prepetition out-of-court marketing through DH Capital had generated approximately $50 million in proceeds from two data center sale-leasebacks and roughly $21 million from three workplace recovery sale-leasebacks since 2019, but the proceeds did not resolve the underlying leverage. International divestitures of remaining operations continued post-emergence, including Viatel's acquisition of the Irish business in May 2023.

Capital Structure and the Alter Domus Term Loan Stack

The debtors entered chapter 11 with approximately $424 million of aggregate prepetition funded debt across four facilities. PNC Bank served as agent and lender on a $50 million asset-based revolving credit facility executed in August 2019, with approximately $29 million outstanding at the petition date, $11 million in additional letters of credit, and a $13.5 million cash collateral restriction. Alter Domus Products Corp. served as administrative and collateral agent on three term loan instruments. The first lien term loan (December 2020) carried approximately $108.2 million outstanding and included a $7 million bridge tranche under Amendment No. 2. The legacy non-extending second lien facility (May 2019), originally sized at $300 million, had approximately $8.9 million outstanding after the 2019 restructuring exchanges. The new second lien facility (December 2020), originally sized at $298.3 million, carried approximately $277.6 million outstanding. The December 2020 facilities were executed as part of an amend-and-extend transaction that pushed out 2019 restructuring-era maturities to 2024 and led S&P to raise Sungard AS's issuer credit rating from selective default. Capital leases added another roughly $15 million as of December 31, 2021. The first lien and second lien obligations were governed by intercreditor agreements, and all facilities other than the obligations of the parent itself were guaranteed by the operating debtor entities.

Dual-Track RSA and Reserve-Price Credit Bid Cap

Concurrent with the petition, the debtors executed a Restructuring Support Agreement with an ad hoc group of term loan lenders represented by Proskauer Rose holding more than 80% of the prepetition term loans. The RSA defined two parallel paths: a Section 363 sale of all, substantially all, or subsets of the assets, or an equitization of the prepetition funded debt through a plan of reorganization. The term loan group also committed to back the sale process through the DIP roll-up and credit bid currency.

The bidding procedures included a reserve price mechanism. The Term Loan DIP Lenders and Prepetition Term Loan Lenders agreed to cap their credit bid at a negotiated reserve price; if third-party cash bids exceeded that reserve, the lender group was barred from overbidding. The reserve price notice was set with a June 29, 2022 deadline, ahead of an originally scheduled July 7 final bid deadline, July 11 auction, and July 14 sale hearing.

$335.9 Million DIP Financing With $190.6 Million Roll-Up

The debtors filed an emergency DIP motion seeking authorization to enter two postpetition facilities. The ABL DIP facility from PNC Bank was sized at $50 million on a senior secured revolving basis, priced at 3.00% per annum plus the Alternate Base Rate, with a $365,000 closing fee payable on entry of the interim order and 4.0% per annum letter-of-credit fees. The term loan DIP facility was sized at up to $285.9 million, comprising up to $95.3 million in new money and a roll-up of up to $190.6 million of prepetition term loan obligations. The term loan tranches were priced at L+9.50% (Tranche A, with up to 8.50% PIK election), L+7.50% (Tranche B, with up to 6.50% PIK), and L+6.75% (Tranche C, with up to 5.75% PIK). Tranche A was issued at a 3.00% original issue discount, and the term loan facility carried a 4.00% PIK backstop fee on the new-money portion, a 2.50% cash transaction fee on the new money payable on third-party sale repayment, a 1.50% per annum unused commitment fee, and a $20,000 annual agent fee.

The term loan DIP matured 120 calendar days after the petition date, with two potential 30-day extensions conditioned on adherence to the approved budget, minimum liquidity of $2 million, receipt of qualified bids, and execution of a purchase agreement for the Lognes campus. The official committee of unsecured creditors received a $50,000 budget cap to investigate claims against the prepetition ABL agent. Judge Jones entered the interim DIP order on April 12, 2022 and the final DIP order on May 11, 2022.

Three-Part Asset Sale to 365 Data Centers and 11:11 Systems

The court entered the bidding procedures order on May 11, 2022, alongside the final DIP order. Rather than yielding a single auction outcome, the sale process resolved through three separate transactions tracked to distinct business groupings.

Bravo assets — 365 SG Operating Company. The first transaction sold the U.S. colocation, network, and workplace recovery services to 365 SG Operating Company LLC (also referred to in plan documents as 365 Data Centers). Judge Jones entered the Bravo sale order on August 31, 2022, and closing occurred on November 3, 2022 per the Notice of Occurrence of Sale Closing Date.

CMS/Eagle assets — 11:11 Systems. The second transaction sold the disaster recovery, managed services, and cloud services lines to 11:11 Systems, Inc. for $60 million in cash plus assumption of specified liabilities, with an additional $1.5 million per week payable if closing slipped past October 18, 2022, and a $6 million good-faith deposit. The asset package included traditional and cloud recovery services, mobile workplace recovery, data replication, backup and vaulting, managed recovery programs, and colocation revenue at four facilities in the U.S. and Canada under leases, together with associated IP, contracts, equipment, and goodwill. The original APA was dated August 21, 2022 with a second APA dated September 30, 2022. The court entered a first 11:11 sale order on September 14, 2022 and a second order on October 17, 2022 to address the additional contracts. The Notice of Successful Bid on October 5, 2022 confirmed 11:11 as the prevailing bidder for the CMS/Eagle package.

IP blocks. A separate motion to sell the debtors' IP blocks was filed November 4, 2022, with the sale order entered December 20, 2022. By early November 2022, Sungard had completed the U.S. asset sell-off and announced it would wind down four remaining U.S. data centers while continuing to evaluate options for international subsidiaries. HCL America Inc. and HCL Comnet Systems & Services Limited filed an objection to the assumption and assignment of their IT services agreements to 11:11, citing inadequate assurance of performance and insufficient transition periods at the closing Houston and Thornton, Colorado data centers and seeking a minimum 12-month transition period.

Wind-Down Plan, First Lien Cramdown, and Cross-Border Recognition

The debtors filed an original combined plan and disclosure statement on June 3, 2022, a first amended version on September 2, 2022, and a second amended plan filed October 13–14, 2022. The court conditionally approved the disclosure statement on September 7, 2022, and Judge Jones confirmed the plan and approved the wind-down under the Confirmation Order entered October 17, 2022. The plan established a wind-down administration with a Plan Administrator distributing sale proceeds to first lien creditors and resolving residual estate matters; no operating reorganized debtor was formed.

The plan classified claims and interests across ten classes. Class 1 (Other Secured Claims) and Class 2 (Other Priority Claims) were unimpaired and presumed to accept. Only Class 3 (First Lien Credit Agreement Claims) was both impaired and entitled to vote, and that class voted to accept. Classes 4 (Second Lien Credit Agreement Claims), 5 (Non-Extending Second Lien Credit Agreement Claims), 6 (General Unsecured Claims), 7 (Section 510(b) Claims), 8 (Intercompany Claims), 9 (Intercompany Interests), and 10 (Existing Equity Interests) were impaired and deemed to reject. The plan disclosed that proceeds from the multiple asset sales were "not sufficient to satisfy the First Lien Credit Agreement Claims in full," meaning second lien and general unsecured creditors received no distribution from the sale waterfall. The court found the plan satisfied Bankruptcy Code sections 1129(a) and 1129(b) by a preponderance of the evidence and crammed down Classes 4 through 10. The Confirmation Order approved debtor releases, third-party releasing party releases, and exculpation of Exculpated Parties under Article XII.

The debtors filed for Companies' Creditors Arrangement Act recognition before the Ontario Superior Court of Justice on the petition date, with Alvarez & Marsal as Information Officer. The Ontario court recognized the Confirmation Order on October 27, 2022. Bar dates were set at June 22, 2022 for general claims and October 10, 2022 for governmental units pursuant to the Bar Dates Motion filed April 22, 2022. Kroll Restructuring Administration LLC, the firm formerly known as Prime Clerk, was retained as claims, noticing, and solicitation agent on April 11, 2022.

The debtors and Element Critical (Chicago Enterprise, LLC) entered an emergency settlement to eliminate mutual prepetition and postpetition claims and facilitate customer transition at three data centers. Element Critical waived a $960,172.22 prepetition claim, the debtors waived a $316,206.00 prepetition claim, and the net postpetition settlement allowed Element Critical a $327,337.87 postpetition claim, with related customer contracts assumed and assigned. The court entered the settlement order on October 26, 2022.

Professional Retentions and the Jackson Walker / Judge Jones Aftermath

The debtors retained Akin Gump Strauss Hauer & Feld LLP as restructuring co-counsel, with Jackson Walker LLP serving as Texas local counsel. FTI Consulting, Inc. served as financial advisor and Houlihan Lokey Capital, Inc. served as restructuring investment banker; both had been engaged in February 2022 along with Akin Gump. DH Capital (subsequently part of Citizens) served as M&A and asset sale advisor through prepetition and postpetition phases. The official committee of unsecured creditors retained Pachulski Stang Ziehl & Jones LLP as counsel and Dundon Advisers LLC as financial advisor.

Final fee awards through the case period included $17,753,852.50 in fees and $85,911.48 in expenses to Akin Gump (net of a voluntary $600,000 reduction on its second/final application), $7,183,429.09 to FTI Consulting, $3,825,000 to Houlihan Lokey including a $3,000,000 restructuring transaction fee plus financing transaction fees, $907,799 to Pachulski Stang for the committee, and $414,495 to Jackson Walker. The Houlihan Lokey engagement letter set the financing transaction fee at the greater of $500,000 or 2.0% of gross proceeds raised, reduced to the lesser of $350,000 or 2.0% if existing lenders or shareholders provided the financing, and added monthly advisory fees.

The case became one of the focal points of the post-confirmation Jackson Walker fee disgorgement litigation arising from the disclosed cohabitation between former U.S. Bankruptcy Judge David R. Jones and Elizabeth Freeman, a former Jackson Walker partner. Judge Jones presided over the Sungard AS case until he stepped down from the complex case panel in October 2023 following disclosure of the relationship. The U.S. Trustee filed a Rule 60(b)(6) motion on November 3, 2023 seeking to vacate all orders approving Jackson Walker fee applications across at least 26 cases in which Jones awarded the firm approximately $13 million in total fees, with Freeman billing approximately $1 million personally. Jackson Walker filed an opposition and sur-reply, and the Wind-Down Debtors joined the U.S. Trustee's amended motion. The District Court issued a memorandum and opinion adopting in part and rejecting in part the bankruptcy court's recommendations and referred the matter to Judge Lopez. Jackson Walker subsequently reached a $385,000 settlement with the Sungard wind-down debtors on July 29, 2025, and the U.S. Trustee then objected to the proposed settlements across the broader case set on August 15, 2025. As of December 2025, the trial regarding the over $23 million in disputed fees was characterized by the presiding judge as "a long way" off.

A separate post-confirmation enforcement matter arose under the 11:11 sale order. On November 18, 2024, 11:11 Systems filed a motion to interpret and enforce the sale order regarding rent adjustment payments, and the court entered an order granting that relief on December 13, 2024.

Key Timeline

Frequently Asked Questions

Who is the claims agent for Sungard AS New Holdings?

Kroll Restructuring Administration LLC, formerly Prime Clerk, serves as the claims, noticing, and solicitation agent. The firm maintains the official claims register and handles case notifications to creditors and parties in interest under the retention order entered April 11, 2022.

Who bought Sungard AS's businesses?

365 SG Operating Company LLC (365 Data Centers) acquired the U.S. colocation, network, and workplace recovery assets under the August 31, 2022 sale order, with closing on November 3, 2022. 11:11 Systems, Inc. acquired the disaster recovery, managed services, and cloud services lines for $60 million in cash plus assumed liabilities under sale orders entered September 14 and October 17, 2022. A separate IP blocks sale closed under the December 20, 2022 order.

Did first lien lenders recover in full?

No. The Second Amended Plan disclosed that combined sale proceeds were "not sufficient to satisfy the First Lien Credit Agreement Claims in full." Only Class 3 (First Lien) voted to accept the plan; the second lien and general unsecured classes were deemed to reject and were crammed down with no distribution from the sale waterfall.

What happened to Sungard AS UK?

On March 25, 2022, the directors of Sungard AS UK appointed administrators after attempts to negotiate a Company Voluntary Arrangement or UK restructuring plan with landlords failed to secure a statutory majority. The First Day Declaration cited historic UK energy price increases as the proximate cause. The U.S. debtors negotiated cross-default waivers with their U.S. lenders the same day to preserve runway for the U.S. chapter 11 commencement.

Why is Jackson Walker still in the news on this case?

Jackson Walker served as Texas local counsel to the Sungard debtors during the chapter 11. After the disclosed cohabitation between former Bankruptcy Judge David R. Jones and former Jackson Walker partner Elizabeth Freeman became public in 2023, the U.S. Trustee filed a Rule 60(b)(6) motion across at least 26 Jones-presided cases, including Sungard, seeking to vacate all Jackson Walker fee awards. The Wind-Down Debtors joined the U.S. Trustee's amended motion. Jackson Walker reached a $385,000 settlement with the Sungard wind-down debtors in July 2025, but the U.S. Trustee objected to the broader settlement set in August 2025, and the trial remains pending.

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