Katerra, a technology-enabled construction company, announced that the company and certain of its U.S. and Cayman Island entities have voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
Katerra has also secured commitments for $35 million in Debtor-in-Possession (DIP) financing from SB Investment Advisers (UK) Limited to fund operations during the Chapter 11 process.
The company’s international operations are not affected by this filing.
Following a thorough review of its strategic alternatives, the company is currently proceeding with certain active projects in a number of states. The company has also entered into commitments for the sale of the Renovations and Lord Aeck Sargent architecture business lines to private buyers, subject to Bankruptcy Court approval.
Katerra recently notified its key stakeholders that many of its U.S. projects will be demobilizing.
The rapid deterioration of the company’s financial position is the result of the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business.
The company intends to file customary motions with the Bankruptcy Court requesting authorization to continue paying remaining employees, vendors, and others in the ordinary course of business moving forward.
