Plastic surgery company goes bust, files Chapter 11 bankruptcy

The company has nearly $70 million in debt and thousands of customers in various stages of treatment.

Feb 15, 2024 - 20:30

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Plastic surgery company goes bust, files Chapter 11 bankruptcy

When a retailer goes bankrupt, customers may be sad but they can easily find someplace else to shop. That new store may be less convenient or not as nice, but there's plenty of choice.

People were sad, for example, when Christmas Tree Shops, Tuesday Morning and Bed Bath & Beyond were forced to close their doors. Each of those chains had some level of a cult-like following that felt the loss, but their customers weren't left in the lurch with unfilled orders or other issues.

That would not have been the case had David's Bridal ended up moving from Chapter 11 bankruptcy reorganization to Chapter 7 liquidation. If that happened, thousands of women likely would not have received wedding dresses they had ordered and paid for. In fact the chain avoided liquidation late last year.

A missing wedding dress, while inconvenient, pales in comparison to what happened to Smile Direct Club customers when that company unexpectedly shut its doors in January. That decision left its customers in various stages of having their teeth straightened without any method of getting the aligners that the company sold.

Not all bankruptcies have the same impact. Now, a major player in the plastic-surgery space has filed for Chapter 11 bankruptcy, and it's trying to assure its customers that it's not going out of business.

Plastic surgery has been growing in popularity.
Image source: Pixabay.

Breast-implant maker files for Chapter 11 bankruptcy

Sientra, which calls itself a surgical-aesthetics company, manufactures breast implants and related products.

"Backed by unrivaled clinical and safety data," the company says, "Sientra’s platform of products includes a comprehensive portfolio of round and shaped breast implants, the first fifth-generation breast implants approved by the FDA for sale in the United States, the ground-breaking AlloX2 breast tissue expander with patented dual-port and integrated drain technology," along with other products.

The company filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of Delaware on Feb. 12. The company said in a post on its website that it plans to sell the business during the bankruptcy process.

Sientra (SIEN) does not have a specific deal with a buyer in place, so its plan remains dependent on it being able to make a deal.

Sientra plans business as usual

Some of Sientra's products, including its breast tissue expander line, are used in ongoing medical treatment. That means that a Chapter 7 filing or any other form of the company going out of business would leave those patients/customers in a difficult position.

The company has said that it will continue to support its customers during the Chapter 11 process. Sientra plans to use its existing cash reserves and $22.5 million in new debtor-in-possession financing from existing lenders to facilitate the sale and support continuing operations.

More on Bankruptcy:

If the plan gets approved, it will include a roll-up of $67.5 million of Sientra’s prepetition debt obligations.

"Rollups are a type of debtor-in-possession financing where a prepetition secured lender provides postpetition financing that is used to pay off the lender's prepetition debt. Rollups effectively elevate the priority of prepetition secured debt," Lexis Advance explains.

“Our goal is to emerge from this process with increased financial stability and positioned for long-term success under new ownership, and we are very encouraged that multiple parties have expressed interest in an acquisition of Sientra,” Chief Executive Ron Menezes said in a statement.

The CEO did not name any of the companies that have expressed interest in buying Sientra.

“We look forward to the opportunity to become part of an organization that understands the value of our broad product portfolio and legacy in plastic surgery. In the interim, we remain focused on providing our customers with quality service, continuous manufacturing, and access to our products,” he added.

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