HOUSTON, TEXAS – Construction technology firm Katerra has voluntarily filed for Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.
The firm has 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. International operations are not affected by the filing, a company release stated, though the company has informed key stakeholders that many of its U.S. projects will be winding down.
“While a number of negative factors have led to Katerra’s current challenges, we are implementing initiatives on multiple fronts to maximize value and provide the best path forward for Katerra and its many stakeholders,” Katerra chief transformation officer Marc Liebman said in the statement.
“Our multi-step action plan has rapidly evolved and includes consolidating U.S. activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process. We are grateful to the extraordinary ongoing work and support of the Katerra team and other core constituencies through this extremely difficult time.”
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 release stated.
Katerra acquired Vancouver-based Michael Green Architecture in 2018, a leading firm in the mass timber and wood design space.