Searles Valley Minerals Inc. Bankruptcy Case

Searles Valley Minerals is pursuing an expedited in-court sale while its final financing and related supplier-liquidity arrangements remain under scrutiny, with the creditors’ committee conducting discovery from HSBC, parent Karnavati Holdings and affiliate Nirma ahead of a July 22 financing hearing; a sale hearing is scheduled for August 26. The committee’s recent efforts include an HSBC document subpoenaDkt. 206 and second-amended deposition notices directed to KarnavatiDkt. 210 and NirmaDkt. 211.

The company and its affiliates commenced Chapter 11 on June 15, 2026, through the voluntary petitionDkt. 1. The filing followed a prolonged operating and liquidity decline: the 2019 Ridgecrest earthquakes caused approximately $50 million of damage, soda ash market volatility pressured the business, fiscal 2026 losses reached approximately $71 million, and the company mothballed its soda ash operations in February 2026. At filing, the debtor reported approximately $85.5 million of secured HSBC debt, $135.2 million of unsecured parent loans, a $76.3 million California cap-and-trade obligation and $47.2 million of trade debt, as detailed in the first-day declarationDkt. 17.

After a prepetition marketing effort failed to produce a transaction, the debtor entered Chapter 11 to run an accelerated sale process. Its proposed operating bridge combined a $20 million junior DIP facility from Karnavati, a separate $20 million liquidity advance under a soda ash supply agreement with TATA Chemicals North America, use of HSBC cash collateral and continued access to the HSBC receivables facility; the framed that liquidity package as support for continued operations through the sale timetable. The immediate case trajectory therefore turns on the July 22 financing hearing and the committee’s investigation of the insider and lender arrangements, followed by the August 26 sale hearing.

The court approved Searles Valley Minerals’ bidding procedures for a sale of certain or all debtor assets, moving the case from first-day stabilization into an estate-wide sale process. The asset bidding procedures order authorizes the debtors to market assets free and clear, designate one or more stalking horse bidders in consultation with the DIP lender, prepetition secured lender, and committee, and offer bid protections capped at 3% of the cash portion of the applicable purchase price, with no protections for insiders, affiliates, or credit bidders.

The order creates the transaction calendar buyers and creditors now need to track: non-binding LOIs are due July 10, 2026, qualified bids are due August 6, the auction is set for August 13, sale objections are due August 18, and the sale hearing is scheduled for August 26 at 1:30 p.m. ET. The near-term LOI deadline makes this an active process immediately, not just a procedural approval; secured lenders, the committee, trade creditors, contract counterparties, and potential strategic buyers now have a compressed window to assess collateral value, contract assumption risk, and whether a stalking horse will shape the auction floor.

Searles Valley Minerals Inc.

Searles Valley Minerals Inc.

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Court sets Searles Valley asset-sale timeline

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