Inotiv Files for Prepackaged Chapter 11 Bankruptcy; Existing Equity to Be Cancelled
Summary
Inotiv, Inc. has filed for voluntary prepackaged Chapter 11 bankruptcy to restructure $326 million in debt, with existing shareholders expected to receive no value.
Key Events
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Chapter 11 Filing
Inotiv and its subsidiaries filed voluntary petitions for Chapter 11 bankruptcy on June 3, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas.
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Debt Restructuring
The company plans a comprehensive restructuring to reduce total funded debt by approximately $326 million, converting a substantial portion into new equity for creditors.
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Equity Cancellation
All existing equity interests in Inotiv will be cancelled without any distribution, resulting in a total loss for current shareholders.
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DIP and Exit Financing
A $65.4 million debtor-in-possession (DIP) financing facility ($25M new money, $40.4M roll-up) will fund operations, converting into a senior secured first lien exit term loan facility of up to $150 million upon emergence.
Analysis
This filing confirms Inotiv's Chapter 11 bankruptcy, a critical step following months of severe financial distress and liquidity issues. The prepackaged plan aims to convert a substantial portion of $326 million in debt into new equity for creditors, significantly reducing the company's funded debt and annual cash interest expense. For existing shareholders, the outcome is dire: the company explicitly states that all existing equity interests will be cancelled without any distribution, leading to a total loss on their investment. This event fundamentally alters the investment thesis for current equity holders.
At the time of this filing, NOTV was trading at $0.15 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $5.2M. The 52-week trading range was $0.14 to $3.32. This filing was assessed with negative market sentiment and an importance score of 10 out of 10.