Inotiv files Chapter 11 bankruptcy, existing shareholders to be wiped out with zero recovery

Inotiv entered a restructuring agreement with its first lien lenders, PIK noteholders, and convertible noteholders to file Chapter 11 bankruptcy no later than June 3, 2026. The agreement sets milestones including confirmation order within 45 days and plan effectiveness within 50 days of filing. This is a formal bankruptcy proceeding to restructure the company's debt obligations.

All existing shares of Inotiv stock will be cancelled with zero recovery when the bankruptcy plan becomes effective. Current shareholders will receive nothing and lose their entire investment. This is a complete wipeout of existing equity holders.

First lien lenders will receive 93% of the new equity in reorganized Inotiv plus remaining exit term loans. PIK noteholders get 21% of the remaining 7% equity plus warrants, while convertible noteholders get 79% of that 7% recovery. This represents a complete capital structure reset with creditors becoming the new owners.

Inotiv and related entities filed voluntary Chapter 11 bankruptcy petitions on June 3, 2026 to implement a pre-negotiated restructuring plan. The filing was made pursuant to a Restructuring Support Agreement, indicating creditor support for the reorganization. The company had already begun soliciting votes on the restructuring plan before filing.

The company will continue operating its business during bankruptcy proceedings under court supervision as a debtor-in-possession. This means management retains control of day-to-day operations rather than having a trustee appointed. The company filed standard first-day motions seeking authority to maintain normal operations including paying employees and vendors.

The company is seeking court approval for debtor-in-possession (DIP) financing to fund operations during bankruptcy. DIP financing typically has priority over existing debt and provides liquidity to maintain business continuity through the restructuring process.

Inotiv filed for Chapter 11 bankruptcy protection, which automatically triggered default provisions across all major debt instruments including the first lien credit agreement, PIK notes, and convertible notes. This means all principal, interest, and applicable premiums became immediately due and payable.

All debt under the affected instruments has been accelerated, making the full principal, accrued interest, and any premiums immediately payable. However, creditors cannot actually enforce these payment obligations during the bankruptcy proceedings.

While debt is technically due immediately, the Chapter 11 filing creates an automatic stay that prevents creditors from taking collection actions. All creditor rights are now governed by bankruptcy court proceedings under the Bankruptcy Code.

Inotiv filed for Chapter 11 bankruptcy protection on June 2, 2026. The company began soliciting votes from creditors on a restructuring plan before formally filing the bankruptcy cases. This is a formal bankruptcy proceeding that will restructure the company's debts and operations under court supervision.

Inotiv entered into a Restructuring Support Agreement, which is a pre-negotiated agreement with key stakeholders outlining the terms of the bankruptcy restructuring. This agreement was announced alongside the bankruptcy filing and solicitation process. Such agreements typically indicate creditor support for the proposed restructuring plan.

The company began soliciting votes from eligible creditors on its restructuring plan before filing bankruptcy. Creditors received a Disclosure Statement and other materials to evaluate and vote on the proposed plan. This pre-packaged approach suggests the company has already negotiated key terms with major creditors.

Kroll Restructuring Administration has been appointed as the claims and noticing agent for the bankruptcy proceedings. Stakeholders can access court documents and case information through a dedicated website and contact center. This establishes the formal communication channels for the bankruptcy process.

The company has disclosed that its Chapter 11 bankruptcy reorganization plan will cancel all existing equity interests without any distribution to current shareholders. This means existing common stockholders will receive nothing and lose their entire investment. The company explicitly warns that trading in its securities is highly speculative during the bankruptcy proceedings.

The company warns that current trading prices for its securities bear little or no relationship to actual recovery value in bankruptcy. This is a formal caution that market prices during Chapter 11 proceedings are disconnected from fundamental value and that trading carries substantial risk.

Inotiv has entered into a restructuring support agreement with multiple creditor groups including first lien lenders, PIK noteholders, and unsecured convertible noteholders. This agreement typically outlines the terms under which creditors will support a debt restructuring or bankruptcy reorganization plan.

The company is proceeding with Chapter 11 bankruptcy cases and will seek Bankruptcy Court approval for various motions throughout the reorganization process. This represents a formal bankruptcy filing to restructure the company's debt obligations under court supervision.

Inotiv intends to emerge from bankruptcy as a private company, meaning current public shareholders will likely see their equity eliminated or severely diluted as part of the reorganization. This represents a delisting event for public investors.

The company is seeking debtor-in-possession (DIP) financing to fund operations during the bankruptcy process. DIP facilities provide working capital while the company reorganizes but typically come with strict covenants and priority claims over existing creditors.

A disclosure statement has been filed, which is a required bankruptcy document that provides creditors with information about the company's financial condition and the proposed reorganization plan so they can make informed voting decisions.