Sorrento Therapeutics is now a post-confirmation liquidation trust case, with the live fight centered on enforcing the confirmed liquidation plan against California plaintiffs whose litigation the trustee and M3 parties say belongs to the trust and violates plan gatekeeping provisions. The bankruptcy court heard argument on the emergency enforcement motions on May 11, 2026, admitted exhibits, and took the matter under advisement, leaving the near-term posture dependent on a forthcoming ruling on injunction and sanctions relief in the May 11 courtroom minutesDkt. 2708.
Sorrento and Scintilla filed chapter 11 in February 2023 after a liquidity and litigation-driven breakdown around the company’s drug-development platform, including a $175 million Nant-related arbitration judgment and roughly $60 million of trade payables described in the CRO’s first-day declaration. The filing put a San Diego clinical-stage biopharma debtor into chapter 11 with a substantial unsecured claims overhang and a need to preserve operating assets, tax attributes, insurance, and cash-management continuity while it evaluated restructuring alternatives through the court process, as framed in the Meghji first-day declarationDkt. 5 and supported by the Korycki first-day declarationDkt. 89.
The case moved from stabilization into a liquidation path by late 2023. The debtors filed an amended chapter 11 plan in November 2023, and the court approved the disclosure statement and confirmed the modified joint plan of liquidation for Sorrento Therapeutics and Scintilla on November 30, 2023, establishing the operative wind-down framework rather than a standalone reorganization of the business in the and . Since confirmation, the restructuring story has shifted to trust administration and litigation monetization: the liquidating trustee filed avoidance and recovery litigation against B. Riley Commercial Capital in June 2025 and later brought fiduciary-duty and other claims against former insiders and related defendants in July 2025 through the and .
The current dispute is an extension of that trust-control posture. In May 2026, the trustee and M3 parties argued that the California plaintiffs are asserting derivative estate claims, threatening trust property and D&O insurance recoveries, and bypassing the plan’s gatekeeping mechanism; the trustee seeks to enjoin the California action, require dismissal, declare the claims trust-owned, and impose sanctions, while M3 seeks enforcement of the plan against claims targeting its restructuring role. Those positions are set out in the trustee’s reply on the California plaintiffs’ responseDkt. 2704 and M3’s reply in support of plan enforcementDkt. 2705, with the trustee’s May 11 demonstrative emphasizing that estate causes of action vested in the liquidating trust and that further prosecution of the California lawsuit would interfere with plan implementation in the trustee demonstrative noticeDkt. 2710.
