On Nov. 30, Winc and its subsidiaries initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
At a hearing on Dec. 6, the Bankruptcy Court granted the company interim approval to enter into a debtor-in-possession facility comprising a $5 million term loan, of which $2 million will be available pending final approval. The DIP financing is provided by Project Crush Acquisition Corp (PCAC), and the DIP facility will be pari passu with the company’s prepetition secured loan with Banc of California. The company continues to operate in the normal course of business and expects this financing, together with cash flow from operations, will support operations and its continued service of customers during the court-supervised process.
At the hearing, the Bankruptcy Court also provided interim approval for a number of customary “first day” motions to enable the company to continue to support its business operations during the pendency of the Chapter 11 Cases. The company intends to file bidding procedures with the Bankruptcy Court to conduct a sale of all or substantially all of the company’s assets in accordance with section 363 of the U.S. Bankruptcy Code.
The company also announced that it intends to execute an asset purchase agreement with PCAC, a stalking horse bidder, regarding a potential sale of substantially all assets of the company. A sale transaction with the stalking horse bidder will be subject to Bankruptcy Court approval and subject to higher or otherwise better offers in an open auction process conducted in accordance with the U.S. Bankruptcy Code.
Young Conaway Stargatt & Taylor is serving as bankruptcy counsel to the company, Canaccord Genuity Group is serving as its investment banker, and RPA Advisors is serving as its financial advisor.