Ebix files for bankruptcy in Northern Texas: Report
The Atlanta-headquartered company has to repay a large chunk of over $600 million credit facility.
US Insurance solution provider has filed for Chapter 11 bankruptcy protection in the Northern Texas district. The company is estimated to have liabilities ranging between $500 million and $1 billion.
The deadline, which has been consistently extended over the past two years, was set to expire on December 18, according to a court filing reported by Bloomberg. According to the report, creditors are exerting increasing pressure on CEO Robin Raina's company to divest its assets.
The Atlanta-headquartered company has to repay a large chunk of over $600 million credit facility.
Several subsidiaries of Ebix have also filed for bankruptcy, the report added. The law firm Sidney Austin LLP has been designated as bankruptcy counsel, with Jefferies LLC appointed to serve as the investment banker overseeing the proceedings.
YourStory has sent queries to Ebix and will update the stories with responses.
This development follows a month after the company missed a deadline to repay a $617 million loan. Creditors had previously declared the company in default in September, citing earlier repayment delays.
Hindenburg Research had earlier levied criticisms against Ebix, specifically calling its money-transfer business unit a “house of cards.”
However, Ebix has contested these allegations, deeming Hindenburg's claims as "misleading and erroneous".
Addressing the concerns raised, Ebix reported that accountants from Alix Partners conducted a review of issues related to the unit's gift card business. The company's board reportedly concluded that “no steps were necessary”.
Earlier, the firm also asserted the accuracy of its financial records, stating that its books and records are in compliance with both accounting standards and reporting requirements of the US Securities and Exchange Commission.
Last year, Ebix secured a temporary restraining order against Hindenburg, , and , prohibiting the republication of the report in India.
Edited by Kanishk Singh