(Bloomberg) — Dental aligner company SmileDirectClub Inc. filed for bankruptcy four years after raising $1.35 billion in an initial public offering.
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The Chapter 11 filing in Texas on Friday allows the company to continue operating while it works out a play to repay creditors. The company’s founders will invest at least $20 million into the company as part of its reorganization, according to a statement.
Nashville, Tennessee-based SmileDirectClub listed $499 million of assets and more than $1 billion of liabilities in its bankruptcy petition.
The company makes plastic aligners that can straighten teeth at a fraction of the price of conventional braces and markets its wares directly to consumers. Its 2019 initial public offering valued the company at $8.9 billion, and made its founders billionaires.
But in the years since, the company struggled with declining revenues, and never turned a profit. It ended up marred in a patent fight with a rival, and cut sales and marketing drastically during the pandemic shutdowns.
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