A potential deal to keep SmileDirectClub Inc. afloat has broken down and the once high-flying tooth straightening startup is shutting down, Bloomberg News reported. The publicly traded company, which filed for bankruptcy in late September, had in recent days been negotiating a deal for its founders to provide fresh capital and buy SmileDirectClub out of chapter 11. But the company failed to get its most important lender and other creditors on board, dooming the effort, attorney Spencer Winters said in bankruptcy court Friday. SmileDirectClub sought bidders for the enterprise over the past two months and found some interest, but all suitors dropped out along the way or submitted unworkable bids. The proposed sale to founders took shape only in recent days, but was conditioned on getting the support of lender HPS Investment Partners and lower-ranking creditors, Winters said. “When it came to the founder-led bid, it was really a Hail Mary,” Winters told U.S. Bankruptcy Judge Christopher Lopez. “We pushed very, very hard this week and it just didn’t come together.” SmileDirectClub’s 2019 initial public offering valued the company at $8.9 billion, and made its founders billionaires. It later struggled with declining revenues and never turned a profit. The company ended up marred in a patent fight with a rival, and cut sales and marketing drastically during the pandemic shutdowns.
