After just 128 days in bankruptcy, Violin Memory, Inc. successfully emerged from chapter 11 on April 21, 2017 after the confirmation of its plan for reorganization by the U.S. Bankruptcy Court for the District of Delaware. The Violin Memory reorganization is the result of a post-petition marketing process that led to a competitive auction over four days in January where affiliates of Soros Fund Management LLC bid to acquire the company through a plan of reorganization that would fund creditor recoveries, provide post-petition financing converting into exit financing and exchange prepetition unsecured debt for sole equity ownership of the reorganized Violin Memory while preserving more than $390 million of net operating loss carryforwards for use by the reorganized company.

Under the confirmed plan, all secured claims, administrative claims and priority claims will be paid in full in cash. General unsecured claims will receive percentage recoveries funded from the Soros affiliates, and all equity interests in Violin Memory, intercompany claims against Violin Memory and subordinated claims are extinguished without recovery. In addition, all international subsidiaries of Violin Memory are being wound down or dissolved, and the company has abandoned its equity interests in those subsidiaries pursuant to section 554 of the Bankruptcy Code.

Violin Memory was advised by Insolvency & Restructuring partners Deryck Palmer and Cecily Dumas and counsel David Forsh, and by Corporate & Securities partner Jim Masetti.

Read more about the Violin Memory reorganization on Law360 (subscription required).