Boxed, an e-commerce technology company that provides bulk pantry consumables to business and household customers, and all of its subsidiaries, initiated voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code to execute a sale of its Spresso software business to its first lien secured lenders while continuing to streamline operations, including an efficient and orderly wind-down of its remaining retail business.
Boxed has been working diligently to improve its financial structure, having entered into a forbearance agreement with its first lien secured lenders as a critical, interim solution to protect the business. However, in line with its efforts to counter the challenging business environment, the company made the difficult yet necessary decision to wind down its retail e-commerce operations over the next several weeks. The company’s board of directors has unanimously determined that seeking Chapter 11 protection is the most appropriate path forward.
“This was an incredibly difficult decision, and one that we reached only after carefully evaluating and exhausting all available options. Although this outcome is not what we worked so hard for, we are thankful to everyone, including our customers, who have supported us along the way. Looking to the future, we are incredibly excited to watch the Spresso business continue under new ownership,” Chieh Huang, co-founder and CEO of Boxed, said. “I am immensely grateful for each and every team member throughout the past decade who has contributed to the journey of Boxed. Through their hard work and dedication, they made a lasting impact on the e-commerce consumables industry.”
Boxed intends to fund and protect its near-term operations and cover administrative expenses through access to its cash collateral as the company winds down during the Chapter 11 process and transitions its Spresso business to a new separate legal entity that will continue as a going concern. The Spresso business customers are not anticipated to see any disruption of service throughout the sale process. The company has also filed certain customary motions with the bankruptcy court to facilitate a smooth transition of operations. These motions are expected to be approved within the first few days of the case following the filing.
Freshfields Bruckhaus Deringer and Potter Anderson & Corroon are serving as legal advisors, FTI Consulting is serving as financial advisor and Solomon Partners Securities is serving as investment banker to Boxed.
Freshfields Bruckhaus Deringer is representing Boxed as debtor in its Chapter 11 filing, the pending sale of its Spresso business, and related corporate, restructuring, executive compensation, governance and securities law matters.
The team representing Boxed at Freshfields has long been led by corporate lawyers Elizabeth Bieber and Ethan Klingsberg, as well as Kimberly Wang, Lauren Lee, Kevin Meehan and Alice Lindemann and executive compensation and benefits lawyer Sarah Ghulamhussain.
Leading on bankruptcy and restructuring matters are Madlyn Primoff, Kyle Lakin, Scott Talmadge, Alex Rich, Henry Hutten, Ali Nuffenbier and Ross Weiser.
Leading on the sale of assets by Boxed are the bankruptcy and restructuring team, as well as corporate/M&A lawyers Enrique Dancausa, Dilara Alpi, Wicy Wang, Tomas Rua, Elen Shlyakhanova and Ethan Klingsberg; IP lawyers Mena Kaplan, Marissa Yu and Chandler Gerard-Reimer; employee benefits lawyers Lori Goodman and Chaim Leggiere; tax lawyers Joe Soltis and Hannah Golden; and data privacy/security lawyers Chris Lyon and Christine Chong.