iLearningEngines, Inc., a Bethesda, Maryland-based AI-powered learning automation and information intelligence company that went public through a SPAC merger with Arrowroot Acquisition Corp in April 2024 at an implied enterprise value of approximately $1.4 billion, filed for Chapter 11 bankruptcy protection on December 20, 2024 in the U.S. Bankruptcy Court for the District of Delaware (Case No. 24-12826) before Judge Laurie Selber Silverstein. The filing followed a devastating sequence of events: a Hindenburg Research short report in August 2024 alleging that revenues and expenses were largely fabricated triggered a 59% stock crash, followed by the CFO being placed on administrative leave, auditor Marcum withdrawing all prior audit opinions, an SEC subpoena, a securities class action, a cyberattack that misdirected $250,000, and a Nasdaq delisting notice. The debtors—comprising four entities with operations in the United States, UAE, Australia, and India—entered bankruptcy with approximately $54 million outstanding under a revolving credit facility with East West Bank and Valley National Bank, approximately 18 full-time employees, and no postpetition financing. After cash collateral use was authorized only through February 21, 2025, DIP financing negotiations reached an impasse, and the debtors terminated all employees on February 14, 2025, the court approved conversion to Chapter 7 on March 6, 2025—approximately 76 days after the initial filing—with a Chapter 7 trustee assuming control to liquidate remaining assets.
