💥New Chapter 11 Bankruptcy Filing - Desktop Metal Inc.💥
3D printing company crashes into chapter 11 with proposed private sale.
On July 28, 2025, Massachusetts-based Desktop Metal Inc. (“DM” or the “company”) and 15 affiliates (collectively with the company, the “debtors”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Lopez). We discussed this sh*tco — a Nano Dimension Ltd. ($NNDM)-owned developer and provider of 3D printing systems — and its sordid history back on June 1, 2025 here:
You’ll recall that once upon a time NNDM had a swarm of activist investors but NNDM’s then-management didn’t give a f***********************ck and, in July ‘24, entered into an ill-advised $183mm merger with DM (with proceeds going to DM’s shareholders and, notably, not DM’s existing convertible noteholders). Thereafter, the activists successfully sh*tcanned NNDM’s management but ultimately couldn’t, despite their best efforts, litigate their way out of the DM merger. Immediately after closing the merger, NNDM was crystal clear it had no love for DM and immediately dove into a strategic review; it — well DM, really — also had to contend with payment of DM’s convertible notes; and NNDM wasted no time reconstituting DM’s board and engaging BK pros. In June we wrote:
“If you think [the activist investors] and the newly appointed board are going to sink significantly more cash into a business they didn’t even want to acquire in the first place, think again.”
Here is Daniel Gilligan, Executive Director in the RX group of Piper Sandler & Co. (“Piper”), the company’s investment banker, discussing attempts to get NNDM to tack on $12mm in incremental funding to a $12mm delayed draw term loan NNDM had already provided in April ‘25 (defined terms as used therein):
On May 9, 2025, the Company, through its counsel, submitted a request to the Nano Lender for an additional $12 million in incremental funding. On May 13, 2025, the Company met with certain members of the Ad Hoc Noteholder Group and its advisors and communicated the urgent need for additional funding. On May 15, 2025, Nano declined to provide additional financing while the Ad Hoc Noteholder Group provided the Company and the Advisors with a term sheet for a proposed financing, the terms of which, including the request for the Nano Lender to subordinate its loan position, were not attainable for the Company. Over the following two days, the Company, with the assistance of the Advisors, prepared a modified financing proposal, including potential terms for DIP financing, and, on May 17, 2025, at the direction of the Board, submitted in parallel its proposal to the Nano Lender, Ad Hoc Noteholder Group, and certain third parties that had signed NDAs. Neither the Nano Lender nor the Ad Hoc Noteholder Group accepted the proposal or provided a counterproposal at that time.
Hang on. So … *checks notes* … DM’s new parent company, NNDM, didn’t want to put more good money after bad … and … *checks notes* … an ad hoc noteholder group didn’t want to put more good money after bad … sooooooo … Piper then went out to other holders of prepetition convertible senior notes … and … *checks notes* … they didn’t want to put good money after bad …. sooooooo … Piper than went out to third-party capital providers, contacting 27 potential partners (including strategics and “well-known commercial banks and specialty institutions that routinely provide asset-based and cash flow-based financing” … even though, uh, there’s never been positive operating cash flow) … and … *checks notes* … they all saw a steaming pile of dung and didn’t want to get embroiled into a non-consensual priming sitch or loan into this disaster on a junior basis … soooooo … Piper then went back to NNDM …
… and NNDM be like …
Yup, bullseye indeed.
You’ll recall from our initial coverage that there was roughly $112mm in outstanding convertible senior notes — “was” being the operative word. After NNDM told the company to get f*cked, what was Piper to do? Well, go back to the ad hoc noteholder group again, obvi!
Back to Mr. Gilligan:
“Shortly thereafter, the Ad Hoc Noteholder Group submitted a proposal for a comprehensive transaction between the Company and certain members of the Ad Hoc Noteholder Group, which contemplated new-money bridge financing.
Ok. Promising.* He continued:
The Company and the Advisors, at the direction of the Board, extensively negotiated the terms of such proposal and, on June 5, 2025, entered into the First Lien AHG Secured Note and the Third Lien AHG Secured Roll-Up Note (collectively, such transaction, the “AHG Financing Transaction”). Pursuant to the Ad Hoc Financing Transaction, the AHG Lenders agreed to provide $10 million of new-money financing under the First Lien AHG Secured Note in exchange for certain terms, including that: (i) the First Lien AHG Secured Note would be super senior in priority and prime the Nano Secured Note, and (ii) an aggregate principal amount of approximately $31 million of the unsecured Convertible Senior Notes would be rolled up into the Third Lien AHG Secured Roll-Up Note. The AHG Lenders funded the additional $10 million in new-money financing to the Company on June 5, 2025. Importantly, the Company’s cash flow forecast at the time showed that more than $10 million would be needed to complete even an expedited sale process.” (emphasis added)
Ruh roh. That sounds … uh … insufficient … to say the least. Anyway, here’s what that whole transaction did to the company’s cap stack:
Due to the shortfall, Piper kickstarted a sale process even before the AHG Financing Transaction closed of all or substantially all of the company’s assets and businesses, formally launching the initiative on or around June 2, 2025; it then went out to around 140 potential financial and strategic buyers only to be told by literally everyone … well … this:
Like, seriously, folks. E.V.E.R.Y.O.N.E. Here’s a live shot of the ad hoc noteholder group, which “…indicated that they had no intention of participating as a potential bidder in any sale process”:
And here’s a live shot at NNDM — yes, they even went back to NNDM — when asked if it wanted to engage in the sale process:
Recognizing that the proceeds from the AHG Financing Transaction weren’t gonna get the company where it needed to go, Piper shot out a request to NNDM and the ad hoc noteholder group “…asking for a proposal for bridge or debtor-in-possession financing….” Want to guess what NNDM and the ad hoc noteholder group responded with? We’ll spare you the suspense … we’ve got our cameras everywhere … here’s another live shot:
And here’s a live shot of Mr. Gilligan in that moment (poor guy, 🥃):
This was followed by more (failed) sale efforts … yada yada yada … and even more (failed) sale efforts … yada yada yada … and yet even more (failed) sale efforts (and some failed DIP financing effort) until finally — ⚡️FINALLY⚡️— Piper re-engaged Anzu Special Acquisition Corp II (“Anzu”), which had previously shown some interest in some assets and continued to hang around the hoop, and got Anzu to agree “…to purchase certain of the Company’s foreign subsidiaries and related U.S. assets in a private sale for $10 million, plus the dollar equivalent of any excess cash held in the Debtors’ foreign subsidiaries, but which is expected to yield $0.” We’re guessing the ink wasn’t even dry yet on the term sheet before someone screamed “file this f*cker!”
And file it they did. In “crash” fashion: there’s, as of the time of this writing a day later, literally nothing on file other than material related to the proposed private sale to Anzu. This is basically a Sunnova-like sitch … but, like, WAY worse.
That’s right, the debtors requested an “emergency first day hearing” to effectuate the private sale to Anzu right out of the gate … or else! … they say.
No, seriously … orrrrrr else … the debtors’ non-debtor German subs would file a German insolvency proceeding and then, like dominos, other foreign subs would file their own proceedings (in Japan and Italy), the $10mm in value would be lost, and this thing would spiral into a chapter 7.
Did Judge Lopez bite on the “or else”? Not entirely. It turns out there was a wee bit more latitude than the debtors initially thought — a circumstance driven in part by Judge Lopez’s inability to schedule the hearing on the emergency motion before July 31, 2025 at 11am CT. Which … *checks calendar* … happens to be a day later than the debtors originally contemplated receipt of the first $4mm tranche of sale proceeds (followed by the second $6mm tranche no later than August 11, 2025). And so, in lieu of a “first day hearing,” the debtors and Judge Lopez participated in a late July 29, 2025 afternoon “status conference” wherein we learned, among other things, that (a) Richard Pachulski hates a crash filing and the potential reputational harm it could do to his firm with all of his being (PETITION Note: this is not, especially in this environment, a “thing” and Judge Lopez didn’t bat an eye), (b) the ad hoc noteholder group has grievances over the merger and wants to pursue potential causes of action against the estate (and NNDM) so they shouldn’t be sold to Anzu or anyone else and all proceeds from the Anzu sale ought to be contingent upon eventual agreement on the use of cash collateral, and (c) Quinn Emanuel Urquhart & Sullivan LLP has an attachment on the very same commercial tort claims the ad hoc noteholder group is threatening to assert (for fees incurred in connection with the merger litigation, lol).
The debtors hope to tackle the emergency motion, then, on Thursday — followed by (hopefully) the consensual use of cash collateral and a to-be-filed wages motion so that employees are taken care of and these cases can live to see another day.
Expect a much fuller docket by then.
The debtors are represented by Pachulski Stang Ziehl & Jones LLP (Richard Pachulski, Gregory Demo, Michael Warner, Maxim Litvak, Benjamin Wallen) as legal counsel,*** FTI Consulting Inc. ($FCN)(Andrew Hinkelman, Chas Harvick) as CRO, CTO and financial advisor, and Piper as investment banker. Independent board members Paul Aronzon and Robert Warshauer are represented by Weil Gotshal & Manges LLP (“Weil”)(Matthew Barr, Kelly DiBlasi, Gabriel Morgan).**** The Ad Hoc Group of Secured and Convertible Noteholders is represented by Paul Hastings LLP (Dan Fliman, Charles Persons, Ryan Montefusco, Isaac Sasson, Lanie Miliotes) and the buyer, Anzu is represented by Jones Day (Oliver Zeltner, Dan Moss, Ryan Sims). NNDM is represented by Paul Weiss Rifkind Wharton & Garrison LLP (Kenneth Ziman, Lewis Clayton, Jeffrey Recher, Kyle Satterfield) and Porter Hedges LLP (John Higgins, M. Shane Johnson, Megan Young-John, Jordan Stevens).
*The ad hoc group of noteholders consists of 100% of the 1L, 100% of the 3L and 90% of the convertible senior notes.
**This company is leaving a trail of bodies and by “bodies” we mean unpaid professional services providers. Behind the funded debt, the company has approximately $40mm in unsecured claims on account of trade and other obligations — exclusive of amounts owed to (i) Quinn Emanuel Urquhart & Sullivan LLP for litigating on behalf of the company against NNDM in connection with enforcing the merger ($29.2mm!), (ii) Latham & Watkins LLP for $8.6mm and (iii) Stiferl Financial Corp. for $2.8mm. Other firms listed in the debtors’ consolidated list of top 30 creditors include Richards Layton & Finger PA and K&L Gates LLP.
***Recognizing a hard-to-get-paid case when it sees one, Vinson & Elkins LLP, which had been company counsel, triggered the “eject” button and slid over the special corporate counsel status.
****The Board retained Weil “…to investigate and assess potential claims arising out of (i) the governance and management of the Debtors and transactions between or among the Debtors, their affiliates, and/or any related parties, including requesting and reviewing documents from the Debtors and their advisors, interviewing witnesses and seeking cooperation of third parties and (ii) Nano’s conduct in connection with the Merger.” Yet, that “…investigation has … paused in light of the Company’s ongoing liquidity challenges.”
Company Professionals:
Legal: Pachulski Stang Ziehl & Jones LLP (Richard Pachulski, Gregory Demo, Michael Warner, Maxim Litvak, Benjamin Wallen)
Directors: Paul Aronzon, Robert Warshauer
Weil Gotshal & Manges LLP (Matthew Barr, Kelly DiBlasi, Gabriel Morgan)
Financial Advisor/CRO: FTI Consulting Inc. (Andrew Hinkelman, Chas Harvick)
Investment Banker: Piper Sandler & Co. (Daniel Gilligan)
Claims Agent: Kroll (Click here for free docket access)
Other Parties in Interest:
Indenture Trustee: US Bank NA
Legal: Shipman & Goodwin LLP (Kathleen LaManna)
1L and 3L Agent: Wilmington Savings Fund Society
Legal: Seward & Kissel LLP (John Ashmead, Andrew Matott, Ronald Hewitt)
Ad Hoc Group of Secured and Convertible Noteholders
Legal: Paul Hastings LLP (Dan Fliman, Charles Persons, Ryan Montefusco, Isaac Sasson, Lanie Miliotes)
Buyer: Anzu Special Acquisition Corp II
Legal: Jones Day (Oliver Zeltner, Dan Moss, Ryan Sims)
Nano Dimension Ltd.
Legal: Paul Weiss Rifkind Wharton & Garrison LLP (Kenneth Ziman, Lewis Clayton, Jeffrey Recher, Kyle Satterfield) and Porter Hedges LLP (John Higgins, M. Shane Johnson, Megan Young-John, Jordan Stevens)
Large Creditor: Quinn Emanuel Urquhart & Sullivan LLP (Benjamin Finestone, Patricia Tomasco)