SmileDirectClub files for bankruptcy
Company lists £1 billion in liabilities
SmileDirectClub, the ‘DIY’ aligner company, filed for bankruptcy on Friday, four years after raising $1.35 billion in an initial public offering.
The Chapter 11 filing in Texas allows the company to continue operating while it works on a plan to repay creditors. The company’s founders will invest at least $20 million into the company as part of its reorganisation, according to a statement.
Nashville, Tennessee-based SmileDirectClub listed $499 million of assets and more than $1 billion of liabilities in its bankruptcy petition.
The company makes plastic aligners that can straighten teeth at a fraction of the price of conventional braces and markets its wares directly to consumers. Its 2019 initial public offering valued the company at $8.9 billion and made its founders billionaires.
But in the years since, the company struggled with declining revenues and never achieved profitability. It ended up in a patent fight with a rival and in August a court ordered SDC to pay Align Technology $63m in an arbitration award.