In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides expert analysis on the bankruptcy filing of Masten Space Systems.
Article Link: https://spacenews.com/masten-space-systems-files-for-bankruptcy/
Summary
Masten Space Systems, a company engaged in developing a lunar lander for NASA, has filed for Chapter 11 bankruptcy with intentions to sell its major assets, including a SpaceX launch credit, to a competitor. The company, which faced delays in its lunar mission due to supply chain issues, reported assets and liabilities each estimated between $10 million and $50 million. Despite the bankruptcy filing, Masten aims to continue operations and maximize value for its unsecured creditors. However, Adam Stein-Sapir, a bankruptcy expert from Pioneer Funding Group, interprets the situation as a strategic move to liquidate the company rather than reorganize, given the prearranged “stalking horse asset purchase agreement” with Intuitive Machines.
- Masten Space Systems filed for Chapter 11 bankruptcy with plans to sell major assets, including a SpaceX launch credit.
- The company has received $66.1 million of the revised $81.3 million NASA award but owes SpaceX $4.6 million.
- Adam Stein-Sapir suggests that Masten’s filing indicates a planned liquidation rather than a reorganization.
Q&A
What does a Chapter 11 bankruptcy filing entail for a company like Masten Space Systems?
Chapter 11 bankruptcy allows a company to reorganize its debts and continue operations while seeking new terms with creditors. However, in Masten’s case, it appears to be a strategic move to liquidate assets and pay off creditors, as indicated by the prearranged sale of assets to Intuitive Machines.
How does the bankruptcy affect Masten’s contractual obligations, such as the NASA award?
The bankruptcy filing may impact Masten’s ability to fulfill its contractual obligations. NASA has stated that it is working with Masten to ensure compliance with Federal Acquisition Regulations and is prepared to transfer payloads to other flights if necessary.
What is a “stalking horse asset purchase agreement” and how does it relate to bankruptcy?
A “stalking horse asset purchase agreement” is a prearranged bid on certain assets of a bankrupt company, setting a floor price for those assets at auction. It ensures a sale but allows the company to seek higher offers. In Masten’s case, it indicates a planned approach to the bankruptcy process. For more insights on bankruptcy proceedings, click here.
