Roanoke-based Luna Innovations Inc. filed for bankruptcy protection in Virginia on Friday morning, as the company seeks to reduce the amount it owes a California company from $36.3 million to $1.3 million.
In addition to submitting its initial filing for Chapter 11 with the U.S. Bankruptcy Court for the Western District, Luna also submitted a plan for reorganization and coming out of bankruptcy. Murphy said he hoped the company’s time in bankruptcy would be short, with everything being resolved within a few months.
The Chapter 11 reorganization filing comes nearly three months after a California jury ordered Luna to pay Hansen Medical Inc. $36.3 million in damages for breach of contract and misappropriation of trade secrets.
In documents filed with the bankruptcy court, Luna listed assets of about $29.8 million and debts of about $55.6 million.
If Luna’s reorganization plan is confirmed by the court, it would allow Luna to pay its creditors 100 percent and leave its current shareholders in place.
The news of Luna’s bankruptcy filing sent shares of the company down nearly 38 percent to 33 cents Friday morning in heavy volume.
The filing also prompted Nasdaq to send a letter to the company saying Luna would be delisted from the stock exchange. The letter said trading of Luna’s common stock will be suspended on July 28, unless Luna requests a hearing to appeal the delisting. Luna plans to request the hearing, and the stock will remain listed on the market pending the outcome of the hearing.
From the Roanoke Times Article by Sarah Bruyn Jones