Nogin files bankruptcy, lines up deal with B. Riley, convertible holders

By Sarah Lizee

Olympia, Wash., Dec. 6 – Nogin, Inc. filed Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the District of Delaware, according to court documents.

The company cited an “evolving and highly competitive” market for e-commerce solutions.

“The debtors face intense competition from other software companies that may offer related e-commerce platform software solutions and services, as well as from larger companies that have acquired e-commerce platform solution providers in recent years,” Vladimir Kasparov, chief restructuring officer of the company, said in a declaration.

On Oct. 20, the debtors’ management contacted B. Riley Principal Investments, LLC to gauge its interest in providing debtor-in-possession financing and pursuing a transaction under Chapter 11 of the bankruptcy code.

The debtors received a non-binding term sheet from B. Riley on Nov. 2 proposing a restructuring transaction.

Nogin said it reached out to other prospective investors and business partners, but B. Riley was the only party that expressed an interest in pursuing a restructuring transaction that would address the debtors’ near- and long-term liquidity needs.

The debtors, B. Riley and an informal group of holders of the company’s convertible senior notes began negotiations that ultimately led to a Chapter 11 restructuring support agreement dated Nov. 16.

After entering into the RSA, the debtors, B. Riley as plan sponsor, and the informal convertible noteholder group negotiated a senior secured super-priority debtor-in-possession credit facility in a total principal amount of up to $24.7 million, inclusive of a $10.2 million rollup of bridge loans.

BRF Finance Co., LLC is the DIP agent.

Interest is 15% per annum, with default interest being an additional 2%.

The facility is set to mature on Jan. 2.

The DIP financing sets out some case milestones, including filing a Chapter 11 plan within three days, receiving approval of a disclosure statement by Jan. 18, and the plan becoming effective by March 13.

The company is seeking interim access to $19.2 million of the DIP facility, with the remaining to be made available following a final order.

The company is also seeking approval to access cash collateral.

Nogin said access to the cash collateral and DIP financing will provide necessary liquidity to conduct a value-maximizing process in the Chapter 11 cases, whether by sale or under a Chapter 11 plan.

Under a Chapter 11 plan, the DIP facility would be equitized into 100% ownership of the reorganized debtors or to acquire substantially all of the debtors’ assets.

Convertible noteholders will receive their pro rata share of $15.5 million, funded from either the debtors’ available cash or by the plan sponsor, together with a priority claim on the proceeds of certain estate causes of action to be conveyed to a creditor trust.

B. Riley, the consenting noteholders and additional parties will receive releases of all estate causes of action.

The RSA parties have agreed that the proposed transaction will be subject to higher and better offers through the court-supervised auction process.

In its petition, the company listed $10 million to $50 million in assets and $100 million to $500 million in liabilities.

Its largest unsecured creditors are Jefferies, based in New York, with a $7.72 million professional services claim, Stifel, based in St. Louis, with a $4.23 million professional services claim, Latham & Watkins, based in Carol Stream, Ill., with a $2.38 million professional services claim, Commission Junction LLC, based in Chicago, with a $1.22 million professional services claim and Scotch & Soda Brand Holdings LLC, based in in New York, with a $1.07 million trade debt claim.

Nogin is represented in its case by Young, Conaway, Stargatt & Taylor.

The New York-based online retail company filed bankruptcy under Chapter 11 case number 23-11945.

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