iLearningEngines is now in Chapter 7 liquidation following its March 6, 2025 conversion, with all employees having been terminated on February 14 and no operating reorganization path remaining. The case began as an emergency effort to preserve the enterprise, but the debtor’s limited liquidity runway expired before it could stabilize operations.
The company filed its Chapter 11 petition on December 20, 2024Dkt. 1 after a rapid deterioration that followed a short-seller report, a sharp decline in its stock price, the placement of its CFO on leave, withdrawal of prior audit opinions, and an SEC subpoena. The debtor entered bankruptcy needing immediate access to liquidity and carrying approximately $54 million in funded debt under a revolving loan secured by substantially all assets. Its first-day declarationDkt. 42 described a reduced workforce and warned that, without access to cash, liquidation was imminent.
The Chapter 11 strategy depended on consensual use of lender cash collateral rather than a new-money DIP facility. The debtor’s cash-collateral motionDkt. 41 sought authority to fund operations under a short-term budget while granting East West Bank and Valley National Bank adequate protection, including replacement liens and superpriority claims. That authority was ultimately extended only through February 21, 2025 and was not renewed; secured-lender enforcement rights then became exercisable. With the workforce already terminated and the liquidity bridge exhausted, the cases converted to Chapter 7, shifting the path from preservation of going-concern value to trustee-administered liquidation.
