SmileDirectClub seeks DIP-lender sale and structured dismissal
SmileDirectClub moved to sell substantially all remaining estate assets to DIP Agent Cluster Holdco LLC, or its designees, after a 65-day postpetition marketing process failed to produce an actionable third-party sale or restructuring transaction. The proposed consideration includes a roughly $28 million credit bid of DIP obligations, $4.65 million to $7.65 million of cash consideration, including $4 million for a creditor trust and $650,000 for Centerview, plus up to $3 million from future asset dispositions; the assets would transfer free and clear, excluding specified officer/director fiduciary-duty claims and funded reserve cash under the sale motion.
The companion dismissal motion asks to dismiss the Chapter 11 cases after the sale closes and route remaining value through a creditor trust. The Debtors say they ceased operations and terminated the workforce, cannot confirm a liquidating plan because administrative and priority claims cannot be paid in full, and estimate about $17.5 million of administrative claims with an expected initial recovery of about 22.8%. Objections to both motions are due January 10, 2024, with a January 18 hearing set by the notice of hearing.