Jumio, an online identification verification company whose clients include United Airlines Inc [UALCO.UL] and Airbnb, has filed for Chapter 11 bankruptcy protection for its U.S. business and initiated the sale of assets, according to court documents.
The company, based in Palo Alto, California, said in a court filing on Monday that it has struggled to raise funding for its operations following government investigations into financial irregularities and stock sales by its former management team.
“This has left Jumio with few alternatives,” Jumio Chief Executive Stephen Stuut said in the court filing in Delaware. As a result, he said Jumio had decided to sell most of its assets under a Chapter 11 restructuring process.
“Despite some of the challenges Jumio’s leadership team inherited, our underlying business remains exceptionally strong,” Stuut said.
The company said it has received a stalking-horse bid from Jumio Acquisition LLC, a new entity formed by Facebook Inc co-founder Eduardo Saverin. The bid was valued at about $22.6 million, Jumio said.
The stalking-horse agreement opens the door for other interested parties to make a bid. Jumio said it had received initial interest from 32 potential bidders.
Saverin has also offered $3.7 million in financing to provide liquidity needed to see the company through its bankruptcy proceedings.
Jumio listed assets of between $1 million and $10 million and liabilities of up to $50 million in its court filing.
The case is in U.S. Bankruptcy Court, District of Delaware, No. 16-10682.
(Reporting by Tracy Rucinski; Editing by Matthew Lewis)