Cloud storage provider Tintri, Inc. announced that it filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Tintri will continue to operate its businesses as a debtor-in-possession under the jurisdiction of the bankruptcy court.
According to a regulatory filing the Company filed a motion with the Bankruptcy Court, seeking secured debtor-in-possession credit facility by and between the Company and TriplePoint Capital LLC. The DIP Motion also seeks permission to use the cash collateral of Silicon Valley Bank (SVB) on a consensual basis.
Under the DIP Credit Agreement, TriplePoint has agreed to lend the Company an aggregate new money principal amount of up to approximately $5.5 million, at an annual interest rate of 12.75%. Additionally, the DIP Credit Agreement will provide for a “roll-up” of $25.0 million of the outstanding amount due to TriplePoint under the Plain English Growth Capital Loan and Security Agreement, dated as of February 6, 2015, by and between the Company and TriplePoint, as amended. While all amounts under the DIP Credit Agreement will receive superpriority status (including the roll-up amount), all indebtedness to TriplePoint will be subordinated to the Company’s outstanding loan facility with SVB.
The DIP Credit Agreement is subject to approval by the Bankruptcy Court, which has not been obtained at this time. The Company anticipates closing on approximately $3.0 million under the DIP Credit Agreement promptly following approval by the Bankruptcy Court of the DIP Motion. The foregoing description of the DIP Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the final, executed DIP Credit Agreement, as approved by the Bankruptcy Court.
Tintri intends to continue its efforts to enter into a strategic transaction, including a sale of the company or its assets, following the bankruptcy filing. In this regard, the company has entered into a letter of intent with DataDirect Networks (“DDN”), which contemplates the purchase of substantially all of the company’s assets by DDN under Section 363 of Title 11 of the United States Code. The DDN letter of intent is non-binding and provides no guarantee that a transaction will be completed. The terms of any potential transaction with DDN, or any other strategic counterparty, are subject to a number of contingencies, including the negotiation and execution of definitive transaction agreements, the completion of a bidding process as provided for by the bankruptcy court, and final approval of the bankruptcy court. Consequently, there can be no assurance that Tintri’s efforts to consummate a strategic transaction, including the proposed transaction with DDN, will be successful. Furthermore, even if Tintri were to complete a strategic transaction, the proceeds of any such transaction may be insufficient to allow the company to pay its creditors in full. In any event, Tintri does not anticipate that its stockholders will receive any return on their shares.
Additionally, Tintri has arranged for financing that is intended to bridge the company to a strategic transaction. This financing is expected to consist of amounts available under a proposed superpriority secured debtor-in-possession credit facility with TriplePoint Capital, LLC, as well as the continued use of accounts receivable collections under the company’s secured credit facility with Silicon Valley Bank. This financing is subject to, among other things, the approval of the bankruptcy court.
“We are very pleased to be closely collaborating with Tintri’s cofounders, team members, advisors and creditors to develop a winning plan which is designed to provide Tintri’s customers with continuity in support of their installed base as well as a winning roadmap for their long term requirements,” said Alex Bouzari, CEO and co-founder of DDN.
“Tintri looks forward to continuing to work with DDN on its proposal, which, if completed, would be expected to allow the company to continue to provide its industry-leading technology to the marketplace following the bankruptcy process and into the future,” said Kieran Harty, Tintri’s founder and Chief Technology Officer.