On Monday, April 27, 2020, Sidley’s client Wave Computing, Inc. (Wave), together with certain of its subsidiaries (the Company), commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California (the Bankruptcy Court). The Company, a technology firm, is primarily engaged in the development and licensing of microprocessing chips to customers and maintains a sizeable patent portfolio. Wave is focused on developing artificial intelligence technology with deep-learning capabilities, along with corresponding systems. Currently, the Company is focused solely on licensing its existing software. The first day hearings seeking customary relief were held before Judge M. Elaine Hammond in the Bankruptcy Court on Tuesday, April 28, 2020.
Difficulties in the development of the Company’s newest dataflow processing unit and corresponding systems, together with threatened shareholder litigation and high liabilities incurred during prior commercialization efforts, led to the chapter 11 filing. The Company has approximately US$90 million in outstanding liabilities and seeks to reorganize around its most successful technologies.
The Company intends to operate in the ordinary course of business during the chapter 11 cases and has filed a number of customary “first day” motions to enable the Company’s operations to continue as usual. To help fund the case, the Company has received a commitment for US$28 million in debtor-in possession (DIP) financing that, subject to court approval, will refinance portions of the Company’s existing credit facility and, when combined with cash from operations, will provide ample liquidity to support the Company’s continuing business operations during the chapter 11 cases.
The Sidley lawyers who represent the Company in its bankruptcy case include Sam Newman and Julia Philips Roth (Los Angeles), Banks Bruce, Charles Persons, Dusan Clark, Jeri Leigh Miller, Keshav Dimri and Juliana Hoffman (Dallas) and Vijay Sekhon and Cat Zhang (Century City).