(Bloomberg) -- Mobileum Inc., the analytics software company at the center of a legal battle between two private equity firms, has filed for bankruptcy, according to court papers.
An affiliate of the company listed assets of at least $100 million and liabilities of as much as $1 billion in its Chapter 11 bankruptcy petition filed in Texas.
The company has reached a tentative restructuring deal with key creditors, Mobileum said in a statement. It calls for the company to trim $529 million of debt, receive $60 million of new money and exit Chapter 11 within 60 days.
Last year, the company’s current private equity backer sued former owner Audax Group of misrepresenting the financial strength of Mobileum prior to its $915 million sale in 2022.
H.I.G. Capital claimed Mobileum managers, at the behest of Audax, artificially inflated the firm’s revenue numbers by making up phony client invoices. Audax denied the allegations and countersued.
In an emailed statement, H.I.G. said it supports the company’s bankruptcy plan and will continue pursuing the litigation. A representative for Audax said the bankruptcy filing “is a disappointing and avoidable chapter in the story of what was once a strong, thriving company.”
Company Struggles
Quotes for the company’s second-lien term loan due 2030 dropped to about 5 cents on the dollar in early July, according to data compiled by Bloomberg. That’s down from more than 80 cents at the start of 2023.
Mobileum has been hurt by customers delaying non-core projects in the telecommunications sector and faced challenges with slowed product deployment in the roaming business unit, Moody’s Ratings said in December.
Mobileum said the proposed restructuring is backed by about 88% of its first lien lenders, a senior noteholder, 77% of its second lien lenders and H.I.G. affiliates that own a majority of the company’s equity. A judge must sign off on the deal.
Chief Executive Officer Mike Salfity said in the statement the company expects customers to maintain uninterrupted access to the company’s products during the bankruptcy.
--With assistance from Ellen Schneider and Reshmi Basu.
(Adds Audax statement in sixth paragraph.)
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