aibioInotiv plans $326 million debt cut through prepackaged Chapter 11
Inotiv's prepackaged Chapter 11 plan would cut about $326 million of funded debt, convert a substantial portion of it into equity and cancel existing equity interests.
Key facts
- News type
- Debt Financing
- Primary source
- Inotiv, Inc. 8-K (2026-06-03)
The support agreement
Inotiv, Inc. (Nasdaq: NOTV) entered into a Restructuring Support Agreement on June 2, 2026, according to a Form 8-K. The counterparties are lenders under its first lien credit agreement dated November 5, 2021, and holders of its 15.00% Senior Secured Second Lien PIK Notes due 2027 and 3.25% Convertible Senior Notes due 2027. Holders of substantial majorities of the first lien loans, the PIK notes and the convertible notes signed and voted for the plan in a prepetition solicitation.
The company says the restructuring is expected to reduce its total funded debt obligations by approximately $326 million, through a conversion of a substantial portion of that debt into equity of the reorganized company. It says annual cash interest expense should fall but gives no figure.
The Chapter 11 case
The cases were filed on June 3, 2026, which the agreement calls the Petition Date, in the U.S. Bankruptcy Court for the Southern District of Texas. The creditors committed to support and vote for the plan.
The agreement sets milestones. An interim order on cash collateral and the DIP Facility is due within three days of the petition date, the final and confirmation orders within 45 days, and the plan must take effect within 50 days. The company expects to emerge as a private company and says it does not expect any adverse operational impact.
The debtor-in-possession facility
The consenting first lien lenders will provide a debtor-in-possession facility of $65.4 million. It has two parts: $25 million in new money senior secured superpriority term loans, and a $40.4 million roll-up of delayed draw term loans outstanding under the prepetition bridge facility. At the company's election, interest is SOFR plus 9.00% or the Alternate Base Rate plus 8.00%. The facility matures 90 days after the petition date, subject to extension.
Exit financing and recoveries
On the plan effective date the reorganized debtors are expected to enter a senior secured first lien exit term loan facility of up to $150 million, including paid-in-kind interest, fees, original issue discount and premiums. All outstanding DIP obligations are expected to convert dollar for dollar into exit term loans.
Holders of prepetition first lien claims are expected to receive their pro rata share of 93% of the new equity interests, subject to dilution from new warrants and a management incentive plan.
PIK noteholders are expected to receive 21% of the Notes Recovery, which the filing defines as 7% of the new equity interests plus the new warrants. Holders of unsecured convertible notes are expected to receive their pro rata share of 79% of the Notes Recovery. The new warrants would be exercisable into 11% of the new equity interests on a fully diluted basis, with a strike price based on a post-transaction enterprise value of $350 million and a four-year exercise period. A management incentive plan could take up to 10% of the new equity.
Equity holders and other claims
All existing equity interests in the company will be cancelled without any distribution on the plan effective date. The filing accelerated the first lien credit agreement and both note indentures, though enforcement is stayed.
The claims of the Department of Justice under a plea agreement dated June 3, 2024 are expected to be allowed and reinstated. Claims arising from purchases or sales of any debtor's securities are expected to be discharged, with no distribution.
Who is named
Acquiom Agency Services LLC is successor administrative agent and collateral agent under the first lien credit agreement. U.S. Bank Trust Company, National Association is trustee under the PIK notes indenture, where it is also notes collateral agent, and trustee under the convertible notes indenture. The 8-K names no financial advisor, placement agent or legal counsel. Kroll Restructuring Administration LLC is the claims agent.
What the filing leaves open
The 8-K reports no operating results or cash balance, so the company's claim of no adverse operational impact cannot be tested here. The terms are subject to Bankruptcy Court approval. Beth Taylor, chief financial officer, signed the report.