The Fast Radius Inc (NASDAQ: FSRD) stock price soared 81.4% after the United States Delaware Bankruptcy Court approved all the first-day motions filed by the Company after the firm voluntarily filed for Chapter 11 bankruptcy protection on November 7, 2022.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The favourable ruling will allow Fast Radius to continue serving its customers and maintain its normal operations, including paying vendors for all post-petition goods and services, maintaining employee payroll and health benefits, and Continuing all customer programs.
Investors cheered the ruling, which allowed the company to continue normal operations and emerge out of the bankruptcy process stronger instead of being liquidated, which would have been the case if the judge had ruled against its first-day motions.
The US bankruptcy courts are known for being friendly to debtors, and recent bankruptcy proceeding lend credibility to this claim. Last month, A Texas bankruptcy judge allowed Cineworld to access $715 million of the debtor-in-financing package offered by some of its lenders as part of its first-day motion.
The judge approved the motion despite disagreeing with part of the package that Cineworld’s landlords and junior lenders opposed. Moreover, the recent evidence of the friendly bankruptcy courts might attract more businesses to incorporate in the United States to access the same protections.
Lou Rassey, the Co-Founder and CEO of Fast Radius, said: “We are pleased to have received approval of the first-day motions. This allows us to continue providing our Cloud Manufacturing Platform to our customers without interruption while maintaining our relationships with vendors and business partners. “We thank our customers for their loyalty and our employees for their hard world as we manage through the current environment.”
The contract manufacturing company that manufactures parts and devices for other companies has a robust business model and is exploring a potential sale to repay its debts. Getting a buyer willing to invest cash into the business could keep it operational for longer.
However, the company may be delisted after a sale but will likely sell at a premium.
