Vroom Initiates Prepackaged Chapter 11 Case, Restructuring Support Agreement with Creditors

On November 13, 2024, Vroom, Inc. (NASDAQ: VRM) announced the commencement of a voluntary proceeding under Chapter 11 of the United States Code. The company entered into a Restructuring Support Agreement with creditors holding the majority of the aggregate outstanding principal amount of the company’s unsecured Convertible Senior Notes due 2026 and its largest shareholder.

This Prepackaged Chapter 11 Case is aimed at restructuring the company’s debt obligations and capital structure through a prepackaged plan of reorganization. Vroom plans to operate as a ‘debtor-in-possession’ under the jurisdiction of the Bankruptcy Court and aims to secure approval for certain ‘first day’ motions to ensure the continuity of its operations.

None of Vroom Inc.’s subsidiaries are expected to enter Chapter 11 proceedings as part of this restructuring. The plan includes the termination of the Indenture, and the immediate acceleration of principal and interest obligations has been stayed due to the Chapter 11 filing.

As part of the restructuring process, the company has begun the solicitation of votes on the Plan from certain noteholders. Additionally, a disclosure statement will be distributed to creditors and equity holders entitled to vote under the Plan. Vroom also plans a ‘first day’ hearing to seek emergency relief concerning certain matters.

Interested parties can access copies of the Plan, Disclosure Statement, Restructuring Support Agreement, and related documents through the company’s claims agent, Kurtzman Carson Consultants, LLC d/b/a Verita Global.

It is important to note that forward-looking statements have been included in the filing, highlighting key risks associated with the restructuring process. While the plan aims to restructure debts and improve financial flexibility, uncertainties and risks remain as the process unfolds.

This news is in line with previously disclosed agreements

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Vroom’s 8K filing here.

Vroom Company Profile

Vroom, Inc operates as an automotive finance company. The company offers vehicle financing to its customers through third party dealers under the UACC brand. It also provides artificial intelligence powered analytics and digital services to dealers, automotive financial services companies, and others in the automotive industry for automotive retail.