Casa Systems files Chapter 11 bankruptcy, plans to sell businesses

By Sarah Lizee

Olympia, Wash., April 3 – Casa Systems, Inc. filed Chapter 11 bankruptcy on Wednesday in the U.S. Bankruptcy Court for the District of Delaware to facilitate value-maximizing sales of its businesses, according to a press release.

The cloud computing and broadband networking company said in court documents that it has faced operational and financial challenges, including shifting market dynamics, customer spending delays, customer losses and the Covid-19 pandemic.

“Like many in our sector, Casa has experienced a significant decline in revenue and profits due in large part to industry-wide downward capital investment and procurement trends in the cable and telco markets,” Michael Glickman, chief executive officer, said in the release.

“We also have incurred significant investments to bring our 5G Mobile Core and RAN products to market. We believe the sales of our businesses through a Chapter 11 process will maximize value, preserve jobs and minimize disruption for our customers.”

The company has entered into an asset purchase agreement to sell its 5G Mobile Core and RAN businesses, which include its Axyom Cloud Native 5G Core Software & RAN Assets, to Lumine Group. Casa Systems has asked the bankruptcy court for approval to complete the transaction by the end of April.

The company also entered into a stalking horse asset purchase agreement to sell its cable business to an affiliate of Vecima Networks, Inc. Casa Systems is seeking approval of procedures for soliciting additional bids and to set an auction for mid-May.

In connection with the sale process, the company entered a restructuring support agreement with more than 98% of its senior secured lenders that, among other things, allows Casa to use its cash on hand and proceeds of the anticipated Cloud/RAN Sale to fund its operations and Chapter 11 process.

The company’s prepetition capital structure includes a $180.98 million super-priority term loan with JPMorgan Chase Bank, NA as administrative agent and a $2.06 million stub term loan.

To support its operations during the court-supervised process, the company is filing a variety of customary motions seeking authorization to meet its obligations to its employees, customers and vendors.

Casa’s international subsidiaries are not debtors in the Chapter 11 filing, but some of their businesses and related assets are included in the two asset sale transactions. The international subsidiaries will continue to operate in the ordinary course pending the closing of the sales.

The company’s NetComm business, which started voluntary administration proceedings under Australian law on March 11, is not included in the U.S. Chapter 11 process.

In its petition, the company listed $100 million to $500 million in assets and $100 million to $500 million in liabilities.

The company has engaged Sidley Austin LLP as legal counsel, Ducera Partners LLC as financial adviser and Alvarez & Marsal North America, LLC as restructuring adviser.

Casa is a Delaware-incorporated company with operations in over 70 countries. The Chapter 11 case number is 24-10695.

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