Ex-SPAC Nogin Goes Bankrupt, Plans Sale to B. Riley Unit

Nogin Inc., provider of e-commerce services for the likes of Kenneth Cole, bebe, Scotch & Soda and other retail brands, filed bankruptcy with a plan to sell the business to a subsidiary of B. Riley Financial Inc.

Nogin, which went public via merger with a blank-check company just last year, filed Chapter 11 late Tuesday in Delaware. It plans to implement a restructuring deal that would see B. Riley’s investment unit provide $24.7 million of new financing and ultimately take over the company, court papers show.

Tustin, California-based Nogin blamed its bankruptcy primarily on deals with some of its retail partners that required the business to purchase their inventory. One such agreement with teen-focused retailer Justice saddled Nogin with large amounts of older inventory and drained the company’s cash, according to court papers. The company said it had problems with similar deals for ModCloth, which sells vintage-inspired women’s clothing, and Betabrand.

Nogin Chief Restructuring Officer Vladimir Kasparov said in a sworn statement that the deals contributed to a cash crunch that “made it challenging to remain current with key vendors, and ultimately, several of their customers.”

Nogin listed in its Chapter 11 petition assets of more than $47 million compared to roughly $142.8 million in total debt. Nogin raised $65.5 million as part of its go-public deal last year and the money was used, in part, to pay down older debt, pay the cost of putting the deal together and to give cash to owners of the old company, court papers show.

Owners of Nogin’s convertible bonds would share a pot of $15.5 million under the plan, according to court documents.

The restructuring proposal is subject to better deals, should any come together in the coming weeks, Nogin said.

The case is Nogin Inc., number 23-11945, in the U.S. Bankruptcy Court for the District of Delaware.

--With assistance from Steven Church.

To contact the reporters on this story:
Jonathan Randles in New York at jrandles5@bloomberg.net;
Amelia Pollard in New York at apollard18@bloomberg.net

To contact the editors responsible for this story:
Claire Boston at cboston6@bloomberg.net

Jeremy Hill

© 2023 Bloomberg L.P. All rights reserved. Used with permission.