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| Ebix Inc filed for Chapter 11 bankruptcy protection in Northern Texas. |
Ebix Inc. has filed for Chapter 11 bankruptcy protection in Northern Texas, as reported in a court filing. Additionally, several subsidiaries of Ebix have also filed for bankruptcy, according to a court filing on December 17. The law firm Sidney Austin LLP has been appointed as bankruptcy counsel, and Jefferies LLC will serve as the investment banker for the proceedings, according to the filing.
The filing indicates that each subsidiary and advisors will "conduct a fulsome marketing and sale process" for the company's assets. The case is scheduled to be heard in a Texas court on December 19.
Ebix Inc.'s filing for Chapter 11 bankruptcy protection comes a month after the company missed a deadline to repay a $617 million loan, leading creditors to declare the company in default in September after earlier repayment delays. Creditors had been urging CEO Robin Raina's firm to sell off assets.
Hindenburg Research had criticized Ebix last year, particularly describing the EbixCash unit, a money-transfer business, as a "house of cards."
A spokesperson for Ebix declined to comment on the recent developments. However, the company had previously stated that Hindenburg's allegations were "grossly misleading and erroneous." Ebix asserted that accountants from Alix Partners had reviewed issues related to the unit's gift card business, and the company's board was satisfied that "no steps were necessary," as reported by Bloomberg.
Ebix maintained that its books and records were accurate and complied with accounting and U.S. Securities and Exchange Commission reporting requirements. In response to Hindenburg's criticism, Ebix secured a temporary restraining order last year against Hindenburg, Google, and Twitter, preventing the republication of the report in India.
(With Bloomberg inputs)
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