Case Summary: Danimer Scientific Chapter 11

Business Description

Headquartered in Bainbridge, GA, Danimer Scientific, Inc. ("Danimer Scientific"), along with its Debtor⁽¹⁾ and non-Debtor affiliates (collectively, "Danimer" or the "Company"), is a leading developer and manufacturer of renewable, biodegradable bioplastics designed as sustainable alternatives to petroleum-based plastics.

• The Company's flagship product, Nodax®, is a proprietary polyhydroxyalkanoate (PHA) biopolymer derived from plant oils, which uniquely biodegrades across oceans, freshwater, and landfills.
• Danimer also produces polylactic acid (PLA)-based resins and hybrid biopolymer formulations, addressing customer demands driven by environmental regulations and consumer sustainability trends.

Danimer serves major consumer packaging brands, plastic converters, and manufacturers seeking to transition seamlessly to biodegradable alternatives without altering their existing production processes. Its versatile biopolymers are used across everyday products such as straws, cutlery, food packaging, and other consumer disposables.

For the last twelve months ending September 30, 2024, Danimer recorded revenue of $37.4 million, down from $51.1 million the previous year, primarily impacted by reduced orders following Starbucks' decision to reallocate its biodegradable straw business.

• Despite the revenue decline, Danimer narrowed its net loss to $111.2 million from $144.1 million through aggressive cost-reduction measures, workforce rationalization, deferred capital spending, and the shutdown of certain non-core operations.

As of the Petition Date, Danimer employed 82 staff (81 full-time, 1 part-time), a substantial reduction from approximately 170 employees prior to a workforce restructuring completed just days earlier.

The Debtors filed for Chapter 11 protection on Mar. 18 in the U.S. Bankruptcy Court for the District of Delaware. As of the Petition Date, the Debtors reported $622.5 million in assets and $449.5 million in liabilities.

⁽¹⁾ For a complete list of debtor entities, see the organizational structure chart below.

Corporate History

Founded in 2004 as Meredian Holdings Group, Inc., Danimer initially focused on developing corn-based PLA resins through collaboration with NatureWorks LLC, notably creating biodegradable paper cup linings. A significant milestone came in 2007 when Danimer acquired critical intellectual property from Procter & Gamble, including the Nodax® technology, laying the foundation for its entry into the PHA market.

Public Listing and Expansion

• In December 2020, Danimer became publicly traded (NYSE: DNMR) following its merger with Live Oak Acquisition Corp., a SPAC, raising substantial capital and fueling ambitious expansion plans driven by growing global sustainability initiatives and increased regulatory pressures against single-use plastics.
• In August 2021, Danimer strategically expanded its technology platform by acquiring Novomer, Inc. for approximately $152 million, gaining access to Novomer’s patented catalytic polymerization technology used in producing Rinnovo®, a complementary, lower-cost PHA biopolymer.

Operational Challenges and Leadership Transition

• Operational challenges, including delays in customer commitments and underutilized production capacity, led to significant liquidity pressures. To preserve cash, Danimer initiated extensive workforce reductions in late 2024.
• Concurrently, CEO Stephen Croskrey stepped down, replaced by Richard Altice as interim CEO, tasked with overseeing strategic restructuring initiatives.
• Following persistent share price declines, Danimer’s stock was delisted from the NYSE in January 2025, transitioning to OTCQX trading.

Organizational Structure

Operations Overview

Danimer operates two principal manufacturing platforms—PHA fermentation and PLA reactive extrusion—supported by significant R&D capabilities. Its R&D hub, located at its Bainbridge campus, collaborates closely with academic partners, notably the University of Georgia, and maintains a robust patent portfolio exceeding 750 granted and pending patents across nearly 20 countries.

Manufacturing assets include:

• Winchester, KY Facility: The world’s first commercial-scale PHA fermentation plant with approximately 55 million pounds of annual Nodax® production capacity.
• Bainbridge, GA Facility: Specializes in reactive extrusion, primarily for PLA-based resins, with approximately 25 million pounds annual capacity.
  • Plans for substantial expansion into additional PHA production were initiated but halted during restructuring, with approximately $189.5 million invested to date.
• Rochester, NY Facility (Novomer): A pilot facility dedicated to producing the Rinnovo® polymer via chemical polymerization, intended to deliver cost efficiencies and production flexibility within Danimer’s broader product offering.

In response to anticipated market growth, Danimer commenced construction of a significant Greenfield facility in Bainbridge, GA. However, the project was paused following delays in key customer adoption of Danimer’s biopolymer products.

Prepetition Obligations

Top Unsecured Claims

Events Leading to Bankruptcy

Operational Underperformance and Low Utilization

• Danimer's financial distress traces back to the ambitious growth expectations set following its SPAC merger in late 2020. Despite significant investment in production capacity expansions, particularly at the Greenfield Bainbridge facility, anticipated customer commitments failed to materialize at scale.
• Underutilization of existing plants, heightened by supply chain disruptions and inflationary pressures, compounded ongoing operating losses, with Danimer’s facilities operating at approximately 15% of total capacity.

Liquidity Crisis and Customer Commitment Delays

• Danimer’s liquidity worsened significantly after it defaulted on its Convertible Senior Notes in December 2024, triggering cross-defaults under other loan facilities.
• Efforts to stabilize liquidity included securing approximately $11.25 million in bridge financing to support the anticipated launch of a major quick-service restaurant (QSR) customer relationship.
• However, after prolonged negotiations, the prospective major QSR customer significantly reduced its projected order volume, ultimately delaying a firm commitment until mid-2025.
• This setback was severe. It caused a strategic investor, whose participation hinged on securing this key customer relationship, to withdraw from negotiations.

Chapter 11 Filing

• Facing imminent insolvency and depleted liquidity options, Danimer Scientific filed for Chapter 11 protection on March 18, 2025, in the District of Delaware, with its board determining that restructuring was the most viable path to preserve enterprise value.
• The Company is pursuing an orderly winddown of operations while simultaneously marketing its manufacturing facilities and intellectual property through a court-supervised 363 sale process.
  • Assets not sold via the bidding process will be transitioned to a piecemeal liquidation, with a professional liquidator to be retained.
• To support this strategy, Danimer secured a $15 million DIP financing package, including $3 million in new money ($1 million interim, $2 million upon final approval) and a $12 million roll-up of prepetition bridge loans. The facility is intended to fund payroll, winddown operations, and Chapter 11 administration.
• Approximately half of the workforce—around 84 employees—was immediately laid off, with 82 key employees retained to facilitate the winddown, manage receivables, and execute the asset sale and liquidation strategy.

Initial Budget

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